NEW FINANCIAL REPORTING STANDARDS FOR 2015 – IS YOUR COMPANY GETING READY?

The rules, known as Financial Reporting Standard 102 (FRS 102), will come into effect at the end of next year.  FRS 102 is the third and most important of the trilogy of financial reporting standards that form new UK and Irish GAAP (Generally Accepted Accounting Principles). The trilogy is:

• FRS 100 – Application of Financial Reporting Requirements
• FRS 101 – Reduced Disclosure Framework
• FRS 102 – The Financial Reporting Standard applicable in the UK and Republic of Ireland

Irish companies need to start planning for the new standards now as they will have many different impacts related not just to accounting, including repercussions for tax systems and processes.

The new rules simplify accounting procedures. At under 300 pages, the rule book is far shorter than its predecessor GAAP, which is over 2,500 pages long.

FRS 102 now sets out rules for unlisted companies which conform to International Financial Reporting Standards (IFRS) but make more sense for smaller companies.

The new rules will be used by all Irish and UK entities that are not already legally required to comply with IFRS. This includes subsidiaries of listed companies as well as charities.

NEW CONSOLIDATED COMPANIES ACT FOR 2014

The Companies Bill 2012 was published on the 21st December 2012.  The new Bill consolidates the 16 existing Company Acts as well as a number of statutory instruments and judgments.

Main Changes introduced by the New Companies Bill

• The Private Company Limited by Shares changes from “LTD” to be known as a Company Limited by Shares (“CLS”).
• No requirement for a company to have an objects clause. If a company wishes to retain or restrict its objects clause then it will have to re-register as a Designated Activity Company (“DAC”).
• A CLS will have a one document Constitution replacing the current Memo and Arts.
• Minimum of 1 Director and a Company Secretary. If a company has a single Director they cannot act as the Company Secretary.
• Option to hold the AGM by written resolution of the members.
• Ability to pass majority written resolutions
• A mechanism whereby Mergers & Acquisitions between private limited companies will be made available.
• Company Law offences have been categorised on a scale of 1 to 4, 1 being the most serious. The penalties for breach of these offences will range from imprisonment of up to 10 years and/or €500,000 fine to imprisonment of up to 12 months and/or fine of up to €5,000.
• Audit Exemption to be extended to certain small company groups.

Enactment of Companies Bill

The Companies Bill is currently making its way through the House of the Orieachtas and it is anticipated that commencement orders will be signed late 2013 or early 2014.

 

Disclaimer:

The above is only a summary and as such this newsletter should be used as a guide only and not be used as a basis for decision.  Professional advice should be sought before any decisions are to be taken.  Every effort has been made to ensure the accuracy of the information in this release.  In view of its purpose the reader will appreciate that we are unable to accept liability for any errors or omissions which may arise.   Some areas may change before becoming law. 

ERIC POWER FCCA

Budget 2013 Updates

• Other Measures include:-
• Diesel rebate for hauliers from July;
• The Foreign Earnings Deduction for work-related travel will be extended to certain countries beyond the BRICS;
• The R&D tax credit will be changed to double the initial spending eligible for credit from €100,000 to €200,000 to encourage innovation;
• The cash receipts basis threshold for VAT will rise from €1m to €1;25m;

Budget 2013 Updates

Farmers

Get extended rate of stock relief

The general 25% rate and special 100% rate of stock relief, which were due to expire on 31 December 2012, have been extended for a further three years;

Budget 2013 Updates

Mortgage Interest Relief

This will end for first-time buyers this December

There will be an exemption from new property tax up to end of 2016 of new or unoccupied purchases for first-time buyers. Will also apply to those on ghost estates.

Budget 2013 Updates

Pensions

Tax relief will only be allowed to pensions designed to deliver an income of up to €60k (from 1 Jan 2014)

Budget 2013 Updates

PRSI.

Broadening the base for PRSI contributions

– increasing the min payment of self-employed from €253 to €500 and

– abolishing the weekly allowance for employees

PRSI will be put on rental income, investment income, dividends, savings

Budget 2013 Updates

• property tax
• will commence  from 1 July 2013.
• It will be collected by the Revenue
• Owners are responsible for payment
• Based on market value of property as assessed by the owner
• Initial valuation valid up to the end of 2016
• o.18 per cent up to €1m,
• 0.18 per cent for first €1m, plus 0.25 per cent on balance of valuation

Budget 2013 updates

From 1 July 2013, maternity benefit will be taxed like other social welfare payments for income tax but it won’t be subject to the USC.

Any unpaid Household Charge for 2012 will be collected through the Property Tax.

Household charge will cease from 1 Jan 2013,

and NPPR charge or second home tax will end on 1 Jan 2014

Half-year property tax levy this year as it’s starting on 1 July 2013 – eg, €150k-€200k properties will face a charge of €157.

Budget 2013 Updates

Carbon tax increases

€10 per tonne from 1 May 2013

€20 per tonne from 2014