Psc august 2017

AUGUST

2017 LET’S BE SMART AND USE PERFORMANCE INDICATORS (KPIs) Siobhán Rivas May

ECONOMIC OUTLOOK Dr. Constantin Gurdgiev

CO-HABITING COUPLES THE UNINTENDED TAX INHERITANCE NIGHTMARE Eoin O’Neill & Bairbre Dowling

TIPS TO PREVENT MOBILE CHARGES ROAMING OUT OF CONTROL HONE YOUR SKILLS AS AN INSPIRING LEADER MEET THE TEAM

TABLE OF CONTENTS Let’s Be Smart And Use Performance Indicators (KPIs) Siobhán Rivas May Economic Outlook - Dr Constantin Gurdgiev Co-habiting Couples - The Unintended Tax Inheritance Nightmare Eoin O’Neill & Bairbre Dowling Business Briefs Tips To Prevent Mobile Charges Roaming Out Of Control Hone Your Skills As An Inspiring Leader Legal Briefs The Effects of Inflation on Holy Communion Gifts Meet The Team Range of Services

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WELCOME

to the August 2017 edition of our newsletter.

The summer is in full swing and with many people either heading off on holidays or just coming back from one, now is the time where there is new fresh energy and what better way to channel this than reviewing your business. With this in mind, in this newsletter, Siobhán Rivas May, Director of Auditing, has written an article on setting targets and using KPIs to measure these targets.

Then from a personal view point, Eoin O’Neill and Bairbre Dowling, experts in financial planning, have written an article on Co-habiting couples and the inheritance tax nightmare.

There are other interesting articles on areas such as how to hone your skills as an inspiring leader and tips for preventing your mobile charges roaming out of control.

As always, the team here at Peevers Slye Cotter are always here at hand to answer any of your queries or concerns. For any readers that are not clients of the practice, please feel free to call us or drop into us for a free consultation or email us at info@psc.ie.

We hope you find the contents of this newsletter of interest and benefit to you and would appreciate any feedback you may have.

Positive thought for this Newsletter: “A negative mind will never give you a positive life”.

From all the team at Peevers Slye Cotter.

LET’S BE SMART AND USE KEY PERFORMANCE INDICATORS (KPIs) SIOBHÁN RIVAS MAY, FCA

Director of Auditing - Peevers Slye Cotter

We all want to be SMART, but are we SMART in business, that is the question?

In this rapidly changing environment that we live in, are we reviewing our business against these changes? If we are not, we need to start now.

That’s where SMART comes in!

SMART, is setting objectives which are Specific, Measurable, Achievable , Relevant and Timebound. But being SMART is not enough, you need to then measure these objectives with KPIs.

You have heard the term before and some of you may let it float over your head and others know exactly what they are.

KPIs are Key Performance Indicators. It is a quantifiable measure that can be used to determine how well company goals are being met. Now if you have not set up any goals (in the SMART way!), well that’s a different matter entirely, but don’t despair, the team at PSC can help you with this.

What Is A KPI?

For those of you who have business goals: • How often do you review them?

• Are they in that drawer with last years goals?

• Did your business change direction causing your goals to be obsolete?

Many business owners are far too busy working in their business rather than on their business. Like many business owners, are you giving 100% to running the business and not standing back and looking at the opportunities that are there to ensure that your business grows in the right direction?

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Why Are KPIs Important?

When it comes to an employee’s review at the end of the year, it’s hard to tell their performance against others without having KPIs. One person could be late to work, take longer breaks etc against another employee who appears to be diligent and hardworking. Automatically, you would value the more diligent worker. However, when performance is measured through KPIs it could show that the late starter is more efficient and generates more revenue per hour than the employee who appeared to be hardworking.

YOU CAN MEASURE YOUR TARGETS

KPIs are there to measure your goals or targets. So, if you don’t have goals or targets then you can use the KPIs on your current situation and from there set where you would like to be, e.g. Gross profit margin is 64%. You can set a goal for your company to grow this to 66% over the next few months. Each month you can measure this and see how the company is performing against its target.

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Essentially, KPIs encourage accountability for both employees (if they’re not performing) and employers (if KPIs are deemed unreachable).

IDENTIFY AREAS OF IMPROVEMENT

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By setting a target or a goal, you will automatically ask yourself, how can I achieve this? So we want to improve our gross margin as per point 1 above, what can we do?

RECEIVE ACCURATE INFORMATION

With KPIs in place you will look for your financial information on a more timely manner and you will review the detail more thoroughly. This will ensure data entry is more focused and more timely. There is no point in reviewing KPIs months after the event as this will not allow you to make good management changes. There is a lost opportunity where you receive information in an untimely manner.

• Increase price (look at your local competition to check price range - you cannot increase it too much above competitors unless you have a Unique Selling Point (USP).

• Review supplier listing and negotiate better pricing.

• Marketing your product to increase market share.

• Depending on your area of business, review your customer base/client base to establish which customers are contributing to your business and who may not be.

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ENCOURAGE ACCOUNTABILITY

For an employee to work at their best, they need to feel important and part of the organisation. By involving them in the KPIs they become more motivated and will begin to receive greater job satisfaction which will in turn improve their performance in the company. This improvement will be seen almost immediately where you review your KPIs weekly or monthly. When these results are communicated and seen by the team they will receive greater job satisfaction and feel valued and part of the organisation. Boosting morale and improving job satisfaction will always improve performance which will in turn improve the results of the company. It’s a win win situation.

From reviewing employee performances to tracking company progress, there are a number of reasons why KPIs are an important tool in assisting your company’s growth.

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BOOSTING MORALE

IN SUMMARY

TEAM WORKING

KPIs are an essential part of growing your business and making you focus and improve on the weaker areas. By setting SMART objectives for your company, you open up your business to new opportunities which may have passed you by.

The implementation of KPIs will keep you focused, motivate your team and bring you to the next level.

KPIs allow us to review certain areas and asks us why is a certain area not working so well. This could be as simple as work processes not being implemented or forgetting to communicate what it is that we are aiming for.

When KPIs are visual and communicated to the team, then everyone gets on board and strives for the result. In addition to this, teams can give their input as to what is happening on the ground. It could be a case that some targets are out of reach which in turn would de-motivate the team. Again, be SMART in setting your goals or objectives and include the team in doing so.

The team at PSC are here to assist you should you want to improve your business and push forward.

Contact Siobhán to start the process today. srivasmay@psc.ie

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066-7126333

Dr. Constantin Gurdgiev Recently, the World Economic Forum (WEF) published some snapshots of global surveys indicating that the Millennials are the first generation over the last century that are turning increasingly negative in its attitudes and perception of democracy.

According to the WEF, “Not long ago, liberal democracy was regarded by many as not just the best form of government, but the inevitable form of government...In 2017, that view looks naive. New research warns that democracy’s fan base is shrinking, especially among younger people.” And the problem is not limited to the countries with traditionally troubled attitudes to democracy, but holds for the likes of the UK, New Zealand, the U.S., the Netherlands, Australia and Sweden.

To the majority of the political scientists, the decline in democracy’s fortunes is down to a vaguely defined rise in volatility of electoral and geopolitical outcomes. The second prevailing theory of de-democratisation is the alleged decline of societal consolidation. According to this theory, democratic values and institutions require concentration of voters into a small number of dominant ideological systems. Such centralisation secures continuity of strong trust in democratic institutions, social cohesion around the prevalent norms and direct consent by the voters.

Across the globe, the young are less invested in democracy.

Source: Foa and Mounk, The Journal of Democracy, January 2017. www.journalofdemocracy.org

The problem with both of these world views is that they confuse the effects for the causes and ignore, or fail to explain, the elephant in the room: rapidly growing uncertainty (as opposed to volatility) of the socio-economic environments in the Western democracies since the end of the first decade of the 21st century. This latter hypothesis offers a stronger connection between economics and the investment markets, and the evolution of political risks.

‘‘Essential’’ to Live in a Democracy

80%

60%

40%

20%

Decade of Birth

While this phenomenon is a matter of fact, the potential causes for it are a subject of conjectures and debates.

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The Generation X, or X-ers, traces back to mid-1960s and runs through the late 1970s. X-ers enjoy lesser gains in political and socio-economic well-being than the ‘Boomers’, and, post-crises, the X-ers are feeling the economic and social pains. But, they are yet to surrender their belief in social mobility and the pain they feel is cushioned by past gains.

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The Millennials generation, born after 1980, are witnessing a massive collapse of jobs security, poor career prospects, and decline in real risk-adjusted lifecycle incomes. By comparing their own fortunes to those of their predecessors, and by reflecting on the policies responses to the crises, they are increasingly convinced that democracy is the rule by the majority (the ‘Boomers’ and the X-ers) over the minority (their own cohorts).

UNCERTAINTY, NOT VOLATILITY

The idea of volatility in the political environment as a driver for declining fortunes of democratic institutions misdiagnoses the problem for two primary reasons.

The deep uncertainty about their possible futures defines the anxieties of the Millennials about the capacity of the democratic system to deliver economic and social progression, while the deficit of political representation of their generation defines their frustration with democracy.

The political landscape we are facing today is consistent with a Knightian (or deep) uncertainty, rather than with statisticallydefinable and simple volatility. The former is much worse for both analysis and public decision-making/opinion formation than the latter because deep uncertainty does not yield to traditional statistical or actuarial modelling. The extreme tail-events nature of Knightian uncertainty means that past outcomes of electoral choices and legislative decisions are a poor guide to the future preferences and incentives faced by the voters. Hence, the recent experiences of abject failures of the normally accurate probabilistic models to predict outcomes of elections in the U.S., the UK, Austria and the Netherlands, as well as referenda outruns in Switzerland, the Netherlands and the UK.

THE GRAND CANYON OF SOCIO-ECONOMIC DIVISIONS

From investors perspective, this means that normal risk adjustments to financial returns (e.g. value-at-risk framework and traditional factor-based models) no longer hold. Sharpe ratios, leverage ratios, all other mainstream financial risk metrics, as well as risk instruments, like VIX, carry little information about the deep uncertainty underlying the dynamics of financial markets. Investment is increasingly shifting to being a form of art, involving sensing of risks and threats, and carefully-structured thematic advice, than a mechanical factor-based pricing exercise. The added irony here, of course, is the spectacular rise in popularity of roboadvice and passive management vehicles in recent months, both of which are completely unsuitable for risk management in the face of systemic uncertainty.

Three factors combine to shape the Knighting uncertainty felt by the Millennials: demographics, growth dynamics and technological change.

Demographic changes afoot today imply that a gradual reshaping of political leadership, ideologies and institutions that secured democracies in the past is restricted by the extreme polarisation of political participation. During the 1990s and 2000s, the West did not foster political elites’ transition from the Boomers to the X-ers, preferring to stress continuity and preservation of the past over deeper reforms.

This made it impossible for the Western institutions to transition from the politics of the Boomers to the politics of the Millennials. In the U.S., the price of continuing with the Bush-Clinton status quo of the 1990s into the 2010s is the electorate that embraces the polar opposites, the TrumpSanders juxtaposition. In Europe, the fallout from decades of political surrender to technocracy created a twin peaks of extreme left and extreme right populism that are now firmly in control of the opposition.

Secondly, the evidence on de-democratisation suggests existence of different inter-generational perspectives on the ability of democratic institutions to represent diverse and increasingly divergent objectives of various demographic groups. In simplified terms, we are witnessing the polarisation of the electorate on the basis of demographic distribution of power across three broadly-defined generations: •

The ‘baby boomers’ generation are empowered by the status quo political and government institutions and parties (social, ideological and research organisations, lobbyists and social partnerships). This generation enjoys economic returns consistent with their access to power, as reflected in higher wages, the history of past career progression, better jobs security, greater wealth, and so on. The Boomers are political and socio-economic winners.

The end game here is that with less and less room for evolutionary change to catch up with run-away demographic divergence across the electorate, the likelihood of a political system implosion is rising. Geopolitical uncertainty is already a key factor in pricing a range of assets, from cryptocurrencies to commodities, to gold and all the way to benchmark government bonds.

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Although official unemployment is low, for every officially unemployed person in the U.S., there are three more ablebodied adults who neither seek work, nor work. Over the 1985-1999 period, total paid hours of work rose, cumulatively, by 35 percent. Accounting for the changes in population size, the 2000-2015 period saw a decline of paid hours of work per adult civilian of some 12 percent. In their December 2016 report, the “Equal Opportunity Project” team led by the Stanford University economist, Raj Chetty, estimated that the odds of a today’s 30-year-old’s earning more than her/his parents at the same age was 51 percent, down from 86 percent in the 1970s.

A significant spike in such uncertainty can trigger a severe correction in the investment markets. Hedging such losses is virtually impossible without a long-term preparation, yet investors and investment managers are largely unprepared to face this predicament.

In addition to demographic divergence, economic transformation in the post-crisis era is exerting unbearable pressures on the Western value systems. The job-for-life concept and the decadesold education-to-social-mobility-ladder paradigm are gone. The Middle class-defining notion of expecting improvements in the quality of life and real incomes in every successive generation holds no more. Transmission of wealth across generations through inheritance is severely constrained by the fact that pensions gaps for the X-ers are likely to consume all the wealth inheritable from the Boomers. The twin secular stagnation thesis - covered previously in this article - completes the landscape of the Knightian uncertainty.

PIVOTING TO SAFETY

For many decades, since the end of World War 2, Western societies relied on one sole engine for economic growth: debt-financed investment, primarily in physical, human and technological capital. This model no longer works. Currently, long term, real returns on public and private investment linger at around 2-3 percent per annum, well below double digits returns enjoyed in the 1950s and 1960s, 6-7 percent returns over the 1980s and the 1990s. Risk-adjusted human capital investments (education and training, entrepreneurship etc) are yielding returns that are barely above the cost of funding.

As I noted above, hedging this uncertainty is much harder than hedging technical risks. And devoting significant resources to structure a portfolio geared to meet the shocks from this deep uncertainty runs counter to the traditional investors’ pursuit of nominal returns. Traditional simple long-only portfolios diversification combining fixed proportions of mainstream asset classes, such as property, equities and bonds, are not tilted to protect against extreme tail risks that materialise and evolve rapidly in the aftermath of the blowouts in political and systemic uncertainty.

There is no credible alternative to the borrow-to-invest economic growth model. The tech revolution, while a powerful driver for value creation, is so far failing to trigger productivity growth, comparable to that of the 1990s. Meanwhile, robotisation and automation are directly and tangibly threaten the future prosperity of the middle class.

Since 2000, household and non-profit financial institutions wealth in the U.S. rose from $44 trillion to $96 trillion and is now more than $20 trillion higher than at the pre-2008 peak.

But the actual economy did nothing of the sort. Over 19482000, average rate of per capita GDP growth in the U.S. was close to 2.3 percent per annum. From 2000 through 2016, per capital growth was averaging below 1 percent per annum.

On the equities and bonds side, some protection against systemic tail risks and deep uncertainty can be found in ESG (Environmental, Social and Governance) risk-rated funds and by tilting the portfolio of individual instruments toward ESGrated corporates. However, in the end, even these strategies deliver just a partial cover for Knightian uncertainty. Only cash and directly-held precious metals can offer a sufficient buffer against systemic markets corrections, at a price of foregoing significant returns on these assets in the periods outside uncertainty materialisation.

As a young generation, the Millennials are poor in the capital domain and rely more heavily on labour income. This is problematic. Over the 2000-2016 period, the work rate for Americans age 20 and older fell from 64.6 percent in the 1990s to 59.7 percent.

Dr Constantin Gurdgiev is the Adjunct Assistant Professor of Finance with Trinity College, Dublin and serves as a co-founder and a Director of the Irish Mortgage Holders Organisation Ltd and the Chairman of Ireland Russia Business Association. He holds a non-executive appointment on the Investment Committee of Heniz Global Asset Management, LLC (US).

In the past, Dr Constantin Gurdgiev served as the Head of Research with St Columbanus AG (Switzerland), the Head of Macroeconomics with the Institute for Business Value, IBM, Director of Research with NCB Stockbrokers Ltd and Group Editor and Director of Business and Finance Publications. He also held a non-executive appointment on the Investment Committee of GoldCore Ltd (Ireland) and Sierra Nevada College (US).

Born in Moscow, Russian, Dr. Gurdgiev was educated in the University of California, Los Angeles, University of Chicago, John Hopkins University and Trinity College, Dublin.

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COHABITING COUPLES – THE UNINTENDED INHERITANCE TAX NIGHTMARE! EOIN O’ NEILL, QFA AND BAIRBRE DOWLING MBS LIB QFA PSC Wealth Plus

When the ‘Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010’ was passed, it created the legal status of civil partnership for same-sex couples. This meant that the property and financial entitlements that previously only applied to married couples would now apply to registered civil partners.

Only same sex couples could apply to be registered civil partners. The act did not extend this privilege to opposite sex couple as it was felt that these couples already have the option to marry. Following the commencement of the Marriage Act 2015 on 16 November 2015 one can no longer register a civil partnership.

Behind all this legal jargon, confusion exists for those defined as co-habitants in the 2010 legislation, who perhaps believe that they too should enjoy the financial entitlements afforded under the definition of civil partners. The Act defined a qualified Co-Habitant as being “An adult who is in a relationship of cohabitation of 2 years or more (if dependent children are involved) or for 5 years or more in other instances” meaning that either can now legally claim from their deceased cohabitant’s estate.

However, little known to many is that inheritance tax may still be liable (although there are certain exemptions that can be applied for) and where applicable it will be payable at the Group C (strangers in law) €16,250 threshold!

THE INHERITANCE TAX NIGHTMARE There are two important points to be aware of when considering a protection policy for non-married/cohabiting couples:

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If they arrange a protection policy on their own lives for whatever purpose, the surviving partner may be left with an inheritance liability. If the survivor is deemed not to have paid premiums, problems arise!

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That they are still treated as strangers in the eyes of Revenue so for inheritance tax purposes, the threshold which applies being €16,250. Care is needed as to how policies are set up, with the following considerations

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Who pays the premiums?

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Can the small gifts exemption be used?

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The Dwelling House Exemption?

Let’s take the example of Ann and Tom A cohabiting couple, Ann and Tom, decide to take out life cover of €300,000 on a joint life basis to cover any losses each may experience if one of them were to die. Tom is currently unemployed, so Ann will be paying the total premium on the policy until he is employed.

What would the inheritance tax situation be if Ann were to die prematurely?

Unfortunately for Tom, as Ann has paid all the premiums, he is deemed to inherit the whole €300,000 from Ann and must pay inheritance tax on it. Assuming he has not received any other assets under Group Threshold C previously, Tom’s tax liability is:

If Tom had paid for half of the premiums out of their joint account, this would help reduce the tax liability by half. It would be assumed Tom inherited only half of the sum insured, i.e. the half he did not pay for:

€300,000 - €16,250 x 33% = €93,637.50

€150,000 - €16,250 x 33% = €44,137.50

Either way, Tom must pay Revenue either the sum of €93,637.50 or €44,137.50

What’s the solution?

THE ‘LIFE OF ANOTHER’ ARRANGEMENT

THE ‘SECTION 72’ SOLUTION

Under a simple ‘Life of Another’ arrangement, both Tom and Ann take out separate Life Insurance policies on each other, Tom insures Ann and vice versa. This means that each of the policies is owned separately, clearly identifiably and there should be no liability to inheritance tax as they each pay for their own policies. What if Tom is unable to pay premiums, he is unemployed? This can be solved by Ann using the Small Gift Tax Exemption by ‘gifting’ the premiums to Tom which Tom will use to pay for the policy he owns.

Alternatively, each could take out a separate Section 72 life insurance policy to pay off any inheritance tax liability.

The Small Gift Tax exemption is €3,000 a year from any one person to another, so if the premiums are below €3,000 a year, Tom can claim the premiums were gifts. Therefore, in the scenario where Ann was to die, Tom receives the proceeds of the policy he owns without any liability to inheritance tax.

For Tom and Ann, if they buy a house in joint names and one of them dies, the survivor may have a liability to inheritance tax on the value of the house (assuming the house is held as joint tenants). However, in this case they may be able to avail of the Dwelling House Exemption.

THE DWELLING HOUSE EXEMPTION

The solutions in this case would be to either have ‘Life of another’ policies in place or take out a Section 72 policy so the inheritance tax liability is cleared.

Section 72 policies are set up under Section 72 trust, meaning that the proceeds of such policies are exempt from inheritance tax insofar as the proceeds are used to pay inheritance tax. This arrangement may be more important to cover any tax liability for the dwelling house in which the couple are living.

provides a complete exemption from inheritance tax on the value of their home, provided certain conditions are met, basically, that it was and continues to be their home but with having no other interest in any other property. So, if either Tom or Ann had previously owned a property before they met and continued to own it when they began cohabiting, they would not be able to avail of the relief and would have a liability to inheritance tax on the property – not an unusual situation for couples.

Both Tom and Ann could take out a policy on their own life and hold it under Section 72 Trust, with the other being the beneficiary.

In the event of either dying, the sum insured is payable to the survivor as beneficiary, who uses the money to pay off any inheritance tax liability.

In conclusion, cohabiting couples can be vulnerable financially in the event of premature death. It is therefore worthwhile considering your options and putting measures in place to protect your family in such circumstances.

Tom and Ann’s house is valued at €500,000 and they contribute equally to deposit, mortgage repayment and joint mortgage protection policy. Again, if Ann were to die, Tom inherits the house but because he still owns a property purchased a few years back, he is unable to avail of the Dwelling House Exemption. The mortgage is cleared by the mortgage protection policy and he inherits Ann’s 50% of the property, so his inheritance tax liability is 50% of property = €250,000. Threshold for Tom = €16,250.

Residual taxed = €233,750 x 33% = €77,137.50.

For further information or advise on any of the above please contact Eoin or Bairbre on 066 7126333 or info@pscwealthplus.com

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AVERAGE ANNUAL EARNINGS ROSE BY €400 IN 2016

The accommodation and food services sector had average annual total earnings of €17,214, the lowest of the sectors.

Total employee earnings rose by 4% to €61.2 billion across the year, driven mainly by an increase in the number of people at work, as well as a slight rise in the number of weekly hours worked and the small increase in average earnings.

Meanwhile, the CSO figures also show the total cost of employing labour increased by 4.1% in 2016 to €70.8 billion.

Full-time employee regular earnings comprised €48.4 billion (68.3%) of the €70.8 billion total labour costs, while part-time employee regular earnings were €7.5 billion (10.6%).

The other main components were €9.7 billion (13.7%) other labour costs, €3.2 billion (4.6%) irregular earnings, €1.6 billion (2.3%) overtime earnings, and €0.4 billion (0.6%) apprentice/trainee earnings.

Total annual labour costs increased each year between 2011 and 2016.

Average annual earnings in Ireland increased by €400 (1.1%) to €36,919 last year, according to new figures from the Central Statistics Office. This compares with an increase of 1.2% between 2014 and 2015.

Mean annual earnings have risen by more than €1,000 since the height of the economic downturn in 2011.

Average earnings for full-time employees in 2016 stood at €45,611 (+1.2% on 2015), with the average for part-time workers coming in at €16,597 (+1.6%).

The average hourly rate of pay last year was €22.04.

The professional, scientific and technical sector saw the largest increase, at 6.4%, with average annual earnings rising from €41,973 to €44,667 between 2015 and 2016.

However, the information and communication sector had the highest average regular earnings of €49,319 and highest average irregular earnings of €6,216, making it the highest paid sector in 2016.

IRISH ‘BLUE ECONOMY’ OUTPERFORMING GENERAL ECONOMY

“Emerging” marine industries had a turnover of €383 million and provided employment to close to 2,000 people, the study said.

Overall, the sector represents some 1.7% of gross domestic product.

Co-author Dr Stephen Hynes said that the figures showed steady movement towards Government targets for 2030 on “ocean wealth”, but noted that the influence of the ocean on Irish society was even more pervasive than indicated by the analysis.

Current projections, according to Miguel Marques of Price Waterhouse Cooper, show that the global ocean gross value added can be doubled by 2030 and Ireland has the ability to substantially outperform this.

He further identified ‘blue technology’, including aquaculture as key opportunities for Ireland with Brexit representing a potential opportunity for Ireland to reduce some of its dependences economically and diversify more.

Ireland’s small but significant “blue economy” is outperforming the general economy, an NUI Galway (NUIG) study says.

The ocean economy had a turnover of €5.7 billion in 2016 and indirect economic value amounted to €1.57 billion, the study by NUIG’s Socio-Economic Marine Research Unit found.

The study, which was published at the annual Seafest in Galway, said the ocean economy provided employment for more than 30,000 people last year, and found established marine industries had a turnover of €5.3 billion.

Oil and gas exploration and production, marine aquaculture and tourism, and leisure in marine and coastal areas all experienced a significant increase in activity between 2014 and 2016.

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IRISH ECONOMY EXPERIENCES STRONG START TO 2017

It is expected that the good momentum in the exports sector will continue. Domestically, despite unemployment now at a nine year low and personal finances strengthening, headline retail sales growth has moderated. The slowing of retail sales growth is largely due to a 10% year-on-year decline in new car sales, however core sales, excluding motor, continue to show good momentum.

The Government coffers meanwhile experienced a mixed start to 2017, however a strong performance in May has brought tax receipts back to within 1.4% of the government’s target.

The Irish economy experienced a strong start to 2017, driven largely by a robust export performance.

Exports have to-date risen 10% year-on-year, with the country’s trade surplus expanding by 18% to €17.1bn, according to the latest Investec Irish Economy Monitor.

This is particularly impressive given the currently sterling violation.

DUNGARVAN GETS €8M INVESTMENT

Around 6.5bn Panadol tablets are produced in Dungarvan each year — 150 tablets per second — exporting to over 70 countries worldwide. The company has been in Dungarvan for 37 years, and employs 700 people across two sites.

The new facility uses locally sourced woodchips to create a carbon-neutral fuel source for the site and is part of GSK’s global sustainability strategy which supports the company’s carbon neutral policy.

GSK Dungarvan site manager Brian Fox said the investment from GSK showed a significant vote of confidence in the Dungarvan facilities as well as in the capabilities of the town and the people of Dungarvan.

Global healthcare giant GSK has opened an €8m biomass energy facility in Dungarvan, Co Waterford, that will reduce its carbon emissions by a third.

The facility is only the second of its kind in Ireland, bringing investment in the facility over the past two years to more than €23 million.

GSK in Dungarvan produces a variety of over-the-counter pharmacy and oral care products and is the global home of Panadol.

more concentrated than they were throughout the 2000s.

Commenting on the report, Goodbody Stockbrokers said that the abolition of water charges and the modest property tax presented an opportunity to address this issue but that the opportunity now appears to have been lost. They further commented that, analysing the implications of hard-Brexit on public finances the ERSI state fiscal space will be reduced by a further €600m in the first 3 years following a hard-Brexit situation. Goodbody’s concluded that while the economy continues to do well the ability for manoeuvre in public finances in the coming years was very limited.

ESRI WARNS ON PUBLIC FINANCES The ESRI has published its latest Economic Commentary which predicts that GDP will grow by 3.8% and 3.6% in 2017 and 2018. This is exactly in line with its Spring estimates.

The most notable changes in the ESRI’s views relate to the public finances. It now expects the budget deficit to come in at 0.5% of GDP this year, higher than its previous forecast of just 0.1% of GDP. Following on from this, it warns of the concentrated nature of the tax revenues in Ireland. Using a measure of concentration (the Herfindahl-Hirchman Index), it shows that tax revenues are now significantly

Private renters in other major cities, including parts of Cork and Galway, are also paying up to 8% above the average national rent which now stands at €987 a month — up €1 on the previous quarter. However, while rents nationally continue to trend upwards, the data shows that quarterly growth was relatively flat, increasing by just 0.1%, down from 2.8% the previous quarter.

RTB director, Rosalind Carroll, said the findings for the first quarter of 2017 suggest the rate of increase in private rents is moderating.

The new figures show no additional parts of the country meet the criteria to be designated RPZs. A public consultation was launched on the review of the rent predictability measure and the RPZs system Meanwhile, a report by the Central Bank says house prices — which are expected to rise by a further 10% this year — are “not currently overvalued”.

FIGURES SHOW RISE IN RENTS EXCEPT IN DUBLIN The average rent across the country now stands at €987 per month. New figures by the Residential Tenancies Board show they have risen by just over 7% in the first quarter of this year, meaning the rate of increase has slowed. However, the cost of renting apartments in Dublin has dropped by 1.5% this quarter.

The Residential Tenancy Board (RTB) said it’s still too early to say if the slowdown is linked to the introduction by the Government last year of Rent Pressure Zones (RPZs) — a move which capped hikes in high-rent areas.

The first figures since the introduction of RPZs, show while rent rates in Dublin dropped slightly in the first quarter of the year compared to the same period last year, the capital’s rental rates are still running at 8% above their late 2007 peak.

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TIPS TO PREVENT MOBILE CHARGES FROM ROAMING OUT OF CONTROL

What’s Changed?

The rules may have changed, but we all dread that ‘welcome’ message with warnings about maximum data limits from our mobile providers when travelling out of the country.

Over the last five years, the EU has actively worked at reducing roaming charges. However, Simon Moynihan of Bonkers.ie warns that while customers will benefit from better rates and terms, you should not get too comfortable. Instead, speak to your mobile provider first and find out exactly how much data you have available before travelling abroad.

While you can roam at the same price you pay at home, there are limits to the extent. Many plans only offer 1GB for roaming, and 1GB doesn’t go far.

15th June 2017 was ‘Roam Like Home’ day, the day on which the EU enacted new legislation that scraps roaming charges. Sadly, not much has really changed. In this article we’ll tell you what you need to know about Roam Like Home, and how you can save on roaming costs.

Will It Be Unlimited?

No. Even normal data packages already have built-in fair use limits. They are typically generous and most people don’t use them up. According to Virgin, the average customer uses approximately 2.6GB per month. Most unlimited packages have a 5-30GB fair use limit, and if you exceed it, you will be charged for the additional data.

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Fair Use

How Much Is a GigaByte, Exactly?

The EU fair use limits are not always the same. Meteor’s €10 pre-pay plan has a 7.5GB fair use limit and 2.1GB for roaming.

Their bigger bill pay SIM-only package offers 10GB locally and 7.4GB abroad.

You would be shocked to find that 1GB does not go very far well, depending on your preferred usage. For 1GB, you can:

In most cases, bill-pay plans have more restrictions than prepay plans.

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listen to about 160 songs on Spotify

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travel via Google Maps for 17 hours

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watch Youtube videos for 300 minutes

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or watch an hour of Netflix.

Many plans still allow only 2GB of roaming, so when you travel a lot, you could easily hit your limit.

What Is Free?

How to Save Data While Roaming?

Depending on your phone usage, you may be able to find a plan that offers services such as data, texts or calls free of charge. In most cases, a bill-pay plan that charges more than €30 a month will provide the most freedom.

You will still receive the welcome message when you roam and you will get warning texts at certain intervals.

What Will They Charge?

Although penalties are capped under new EU laws, you will be subject to penalty fees if you exceed your pre-determined data roaming limits while travelling abroad.

Roaming charges for exceeding the limit, starts at €7.70/GB of data. These charges are set to decrease to €2.50/GB by 2022.

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Ask your provider for the exact data allowance on your specific plan.

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Switch off roaming and use Wifi whenever you can.

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WhatsApp is the cheapest option for messaging, as it uses much less data compared to Facebook and texting.

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Turn off auto-updates on apps, and disable Facebook’s auto-playing of videos. You can leave notifications on.

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Download shows from Netflix before you travel if you want to use that to keep small kids entertained and turn off data before giving them your phone.

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If you have not reached your data limit at home, you’re unlikely to exceed it while travelling. Relax, but be sensible and enjoy!

HONE YOUR SKILLS AS AN INSPIRING LEADER

Organisations make revolutionary breakthroughs when their employees are engaged and inspired.

Inspiration leads to an increase in productivity, which in turn inspires others around them to reach higher.

The good news is that you don’t need to be a born inspiring leader. You can actually hone your skills to become a rare asset to your company. Employer surveys conducted in conjunction with the Economist Intelligence Unit have shown that less than 50% of respondents agreed or agreed strongly that they had inspiring leaders who unlocked employee motivation. Even fewer were of the opinion that their leaders modelled the company culture and values and fostered commitment and engagement.

Bain & Company surveyed 2,000 people in a bid to learn what makes a leader inspirational, and their findings were fascinating.

They found that inspiration alone is not sufficient, just as performance only may actually cost more than an organisation may wish to bear. Leaders who focus on inspiration alone may motivate their teams, however, mediocre results may undermine their efforts.

INSPIRING LEADERS COMBINE A UNIQUE BLEND OF STRENGTHS WHICH MOTIVATE TEAMS AND INDIVIDUALS TO ENVISION HUGE GOALS AND HOLD THEMSELVES AND THEIR TEAMS ACCOUNTABLE FOR THE OUTCOMES. AS SUCH, THEY UNLOCK HIGH LEVELS OF PERFORMANCE THROUGH EMPOWERMENT, RATHER THAN THROUGH CONTROL AND COMMAND. OTHER FINDINGS INCLUDED:

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ONE TRULY INSPIRING ATTRIBUTE IS SUFFICIENT

CHANGE YOURSELF BEFORE YOU TRY CHANGE YOUR EMPLOYEES

Subjects were asked about the attributes of their colleagues that inspired them, and they came up with a list of 33 traits that mattered in four areas, namely:

Even when you understand your company’s winning strategy, you will still have to develop new operating methods.

Constructive disruption is the key to inspiring people to generate results and to put a stop to routines that weaken the organisational culture.

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Development of inner resources optimism, self-regard, stress tolerance

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Connecting with others empathy, humility, vitality

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Setting the tone responsibility, unselfishness, openness

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Leading teams sponsorship, servanthood, focus, vision

As an inspirational leader, you have to be careful to pick the right moment to reinforce an inspiring performance culture.

Choosing the right time will result in real moments of truth and leadership, as you will see in these examples:

Alan Mulally joined Ford in 2006 with the vision to turn the business around. His bold actions changed the way the organisation operated. He chose the right moment to applaud his eventual successor, Mark Fields, for admitting to failure. This set the tone for open, honest communications, which was exactly what the company needed.

A diverse range of leaders inspire groups, which is why it is so important to find leaders who are the right fit to inspire and motivate your organisation, instead of wasting time looking for a universal archetype. As such, anyone can hone his or her skills as an inspirational leader by focusing on and enhancing existing strengths. While there are many different attributes that leaders use to inspire people, having a single trait is enough to double your chances of being a great inspirational leader.

More specifically, if you rank in the top 10% of your peer group when it comes to a single attribute, can double your chances of being viewed as an inspirational leader.

After an eight-year hiatus, Howard Schultz returned to Starbucks, realising that the unique customer-focused experience he had cultivated, had taken a back seat.

Diversification and automation had taken the lead and he had to make swift changes to the direction of the company.

He took a bold step to shut down 7,100 stores in the US for three hours, in order to retrain baristas on the art of espresso making.

The most valued trait indicated by the survey respondents, was centredness. This trait enables you to be mindful, calm under stress, present, empathetic, and a good listener.

MATCH YOUR KEY STRENGTH TO YOUR ORGANISATION’S VALUE PROPOSITION

Workplace safety was Paul O-Neill’s focus when he became the CEO of Alcoa in 1987. He demanded to be notified of all workplace safety incidents within 24 hours, and as such, safety was dramatically improved. Alcoa’s worker injury rate fell to 5% of the US average.

A company can’t just hire any inspirational leader. In order to be effective, companies should hire leaders who reflect their culture, business model, strategy, and unique context. Companies set themselves apart by emphasising specific capabilities.

These single actions by famous leaders illustrate the phenomenon which is inspirational leadership. It starts with changing the way in which you do things in order to create change.

The same applies to leaders. Instead of choosing well-rounded leaders, companies should choose leaders who are ‘‘spiky’’. His or her spikiness must be aligned with the company’s methods for creating value. Spiky leaders zone in on the company’s competitive advantage, and obsess about the capabilities that make them stand out. They focus their resources on those capabilities, and give key players the tools and freedom they need to excel.

Research backs this principle, as shown by the research above.

It is only by doing things differently that leaders can make lasting changes with phenomenal results.

By behaving differently, you too can become an inspirational leader. Individual inspiration creates a gateway to discretionary employee energy, which is critical to optimising your human capital.

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LEGAL BRIEFS

employers conducted by CareerBuilder, an online recruitment company.

The regulators, who together form a group on data protection known as the Article 29 working party, do not themselves make EU law.

But since they police the law’s implementation in the 28 member states - and seek a common interpretation with which to do so - their role is highly influential.

Prospective employees must be told before they submit their job application if the company intends to conduct an audit of their social media profiles, and employers cannot force employees to accept their friend requests.

The working party’s opinion is also likely to govern the interpretation of a new and stricter EU law, known as the General Data Protection Regulation, which is due to come into force in May 2018.

EU REGULATORS CLAMP DOWN ON EMPLOYER SOCIAL MEDIA SEARCHES Employers who check a job candidate’s Facebook or Twitter profile before deciding whether to hire them may be in breach of European law, top regulators have said, as the EU tightens its data protection policies.

According to guidelines published by EU data protection agencies, employers will from now on require a “legal ground” before checking the social media profiles of potential employees.

The regulators add that data collected from a search must be necessary and “relevant to the performance of the job”.

An estimated 60% of employers use social networking sites to screen potential candidates before making decisions, according to a survey of more than 2,000

bail to serious offenders including the extent to which the nature and frequency of previous offending indicate persistent offending and the danger to individuals or the community, which may be presented by release on bail.

Courts will also have more options in imposing conditions on those who are granted bail, including prohibiting an accused from contacting victims, prohibiting him or her from driving when charged with a serious road traffic offence, and the imposition of a night-time curfew.

Other features of the bill include electronically monitoring compliance with bail conditions when requested by the prosecutor, hearing victim evidence at bail proceedings and a requirement that the court give reasons for bail decisions.

NEW BAIL LAW APPROVED

BY OIREACHTAS Legislation providing increased guidance for the courts and greater transparency in the bail process has been approved by the Oireachtas. The Criminal Justice Bill 2016 completed its final legislative stages in June. Justice Minister Charlie Flanagan said it would “strengthen the powers of the Courts, and of the Gardaí, in dealing with persistent serious offenders and persons on bail who pose an ongoing threat to the public”.

Under the Bill, courts will be required to take additional factors into account when considering whether to refuse

BILL AIMS TO ENCOURAGE MORE TO SETTLE THROUGH PERSONAL INJURIES ASSESSMENT BOARD

would strengthen the operational powers of the Board and ensure greater compliance with the Board process.

It will also provide for the Book of Quantum, an important benchmark for damages claims for practitioners, to be reviewed every three years.

The Minister further commented that it is another step in the Government’s efforts to address the increasing cost of insurance, as the cost of settling personal injury claims is recognised as a major contributory factor to these costs.

The general scheme of a Bill to encourage more claims to be settled through the Personal Injuries Assessment Board has been published.

Former Justice Minister, Frances Fitzgerald said that the Personal Injuries Assessment Board (Amendment) Bill

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THE EFFECTS OF INFLATION ON HOLY COMMUNION GIFTS A recent survey by Ulster Bank found that in 2017, there has been a 4% increase in the gifts Irish children received for their First Holy Communion compared to the same period last year.

While the amount parents spent on the event - €845 - was roughly the same in both 2016 and 2017, the amount of monetary gifts received by children increased. In 2016 the average amount was €546, however this year 23% received €800 and 13% received in excess of €1,000. Figures show boys received more than girls with an average of €591 and €550 respectively.

Overall spending in preparation for the First Holy Communion day rose by just 1%, following on from a 12% increase between 2015 and 2016. There was a 48% decrease on children’s entertainment spending, with people spending on average €78 and €41 on hair and makeup.

The food, beverages and celebrations at a First Holy communion event cost an average of €388, increasing by 5% from last year. Approximately €185 was spent on the child’s clothing for the day, and €153 on that of the other family members. 92% of parents used their savings to pay for the day, which accounts for a 5% increase on the 2016 figures.

The report concluded that a First Holy Communion is the perfect opportunity to teach a child about savings and finance.

On that note, 85% of parents said they would put some portion of the monetary gifts in a savings account for their children.

18% of parents allowed their children to spend the money they received. The amount of money spent on toys increased by 2% to 42%, and 31% of children bought clothes. Others bought sports equipment (16%), computer games (15% - down from 19%), and books (14% - down 2%).

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Meet the Team John Slye FCPA

Seamus Cotter AITI, FCPA

Partner

Partner

John is the founding partner of the practice which was set up in 1981.

He is based in the Tralee office. He specialises in business advice and support. John provides tax consultancy and business advisory services to an extensive portfolio of clients including retail, pharmaceutical, hospitality, medical, construction, farming and service industries. He offers innovative solutions regarding financial and succession planning.

John is a qualified accountant and a Fellow of the Institute of Certified Public Accountants for over 30 years.

Seamus is a qualified accountant and tax advisor with over 25 years’ experience and is based in Tralee. He joined the practice in 2000 having previously worked at a managerial level in a large nationwide practice. He manages an extensive portfolio of clients across many different sectors.

He specialises in providing business advisory, tax planning, financial reporting and accounting services to our broad range of small and medium enterprise clients. Seamus is a Fellow of the Institute of Certified Public Accountants and an Associate of the Irish Taxation Institute.

Neal Peevers, FCPA

Noel Fitzgerald CPA

Partner

Partner

Neal joined the partnership in 1984 and together with Noel Fitzgerald, he manages the Killorglin and Cahirciveen offices. Prior to this he worked in Dublin for many years, where he gained invaluable experience. He continues to operate a sub office in Dublin. He specialises in SME compliance and new business support and advice. He has extensive knowledge across many sectors including hospitality, construction, manufacturing, farming, medical etc. Neal is a Fellow of The Institute of Certified Public Accountants in Ireland for over 30 years.

Noel is a member of the Institute of Certified Public Accountants in Ireland and has been a qualified accountant since 1990. He is the audit compliance partner.

He joined the practice in 2004, bringing with him an extensive knowledge of business development and management consultancy together with a diverse accountancy knowledge gained while working in a wide range of financial sectors. Noel qualified as an Insolvency Practitioner in 2012 and has undertaken a number of liquidation assignments in recent years.

Michael Daly

Francis Moriarty FCA, AITI

Limerick Branch Manager

Director of Taxation

Michael qualified as an accountant in 1981. He joined the practice in 2011 and brought with him a wealth of knowledge in the areas of auditing, accounting and taxation. He developed and is responsible for our corporate finance department. He has extensive experience in advising clients in areas such as bank and investment fundraising, debt restructuring, state aid and investment packages and business restructuring and insolvency. Although based in our Limerick office he regularly attends all of our offices to provide these specialised services throughout the firm.

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Francis heads up the Taxation department - PSC Taxation Services. This is a leading tax company that advises both companies and individuals.

Francis is a highly experienced tax professional who advises clients in all areas of tax and has particular expertise in the areas of tax planning for privately owned companies; succession and retirement planning; and property transactions. Francis is a member of both Chartered Accountants Ireland and the Irish Tax Institute. Prior to taking up his current role, Francis worked as Tax Director in KPMG for 16 years.

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Siobhán Rivas May FCA

John Fitzgerald AITA, FCA

Director of Auditing

AUDIT SENIOR – KILLORGLIN

Siobhán is a DCU graduate, where she obtained an honours degree in Accounting and Finance. She qualified as a Chartered Accountant in 2002 having completed her training with PWC. She then took up a senior accounting role in a multinational company for 2 years prior to joining the practice. Siobhán has extensive experience across a wide range of industries. She heads up the auditing division and specialises in the provision of audit, accounting and assurance services to medium to large sized companies, charities and owner managed businesses in all sectors of industry.

John graduated with a Bachelor of Commerce (Hons) degree from NUIG and qualified as a Chartered Accountant with a top ten accountancy practice in the midlands. On joining PSC in 2005, he became an associate with the Irish Taxation Institute. He works in the audit and accounts department and leads a number of assignments for large companies and SMEs within a wide variety of industries. He also provides financial and tax planning advice for a number of clients with particular emphasis on reviewing strategies to assist clients in reaching their goals.

Colette Laide

Deborah Flynn

Office Manager - Tralee

Office Manager - Killorglin

Colette has also been with the practice since its inception. She is involved in most aspects of the office. In addition to managing the office, she has extensive knowledge of bookkeeping and compliance.

She oversees a department which provides efficient bookkeeping, VAT, payroll, RCT and other services to a diverse range of clients. Over the years she has gained experience in dealing with the Revenue, Department of Social Protection etc. on behalf of our clients. She works closely with clients to ensure that their affairs are dealt with in a timely manner.

Deborah has been with the practice in Killorglin since 1984. She manages the office while at the same time provides a seamless bookkeeping service, including VAT, payroll and RCT to a large portfolio of clients. She has gained vast experience over the years in dealing with the Revenue and other regulatory bodies. She has developed a very close working relationship with our clients in order to ensure their accounting needs are met. Her portfolio of clients covers a broad range which includes farming, construction, pharmaceutical, retail, services and more.

Phyllis Mason

Phyllis Blacklaw

Company Secretarial Manager - Tralee

Company Secretarial Manager - Killorglin

Phyllis has been with the practice since its inception. She has been involved in almost every aspect of the office and for the past number of years has specialised in company law. She manages the company secretarial department in Tralee which provides compliance and other company secretarial services to an extensive client listing. Phyllis ensures that all our clients filing and reporting deadlines are met while also keeping up to date with the latest legislative changes. Phyllis also has extensive knowledge in the preparation and audit of financial statements.

Phyllis joined the practice in 1997 after gaining extensive experience from her previous roles, including multinational companies. She is based in the Killorglin office and works in all aspects of audit and accounting but has specialised in company law. She manages a large portfolio of clients and provides compliance and company secretarial services to them. Phyllis ensures that all our clients’ company law filing and reporting deadlines are met while also keeping up to date with the latest legislative changes. Phyllis also works closely with clients to assist them with internal control procedures, system updates and financial planning.

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RANGE OF SERVICES AUDIT, ACCOUNTING & ASSURANCE

COMPANY SECRETARIAL

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Preparation of Financial Statements Systems Analysis Audit Exemption Pension Planning Grant Applications Financial Projections Management Accounts

TAXATION •• •• •• •• •• •• •• ••

Company Incorporation Registration of Business Names Annual Returns Compliance Maintenance of Statutory Books Changes in Directors, Secretary or Address Registered Office & Secretarial Services Restoring Companies to the Register Completion of Voluntary Strike Off

BUSINESS STARTUPS

Personal Tax Compliance & Planning Succession Planning Corporate Tax Compliance CGT & CAT Compliance Property Transactions Tax Incentive Schemes Employer Related Tax Returns Internal Tax Issues

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Advice on Most Tax Efficient Structures Advice on Maintaining Books & Records Compliance Duties, Revenue & Companies Office Business Plan & Cash Flow Projections Liaising with Financial Institutions Advice on Accounting Software

BOOKKEEPING & PAYROLL SERVICES

CORPORATE FINANCE, RECOVERY & INSOLVENCY

•• Legislative Compliance including: -- VAT Returns -- PAYE Returns -- P35 Returns & P60 -- Relevant Contracts Tax •• Revenue Audits & Investigations •• Maintaining Books & Records

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Financial Reviews & Personal Debt Solutions Independent Business Reviews Statement of Affairs Strategic & Business Planning Corporate Recovery & Insolvency Liaising with Financial Institutions Forensic Accounting & Liquidation

KERRY TRALEE

KERRY KILLORGLIN CAHERCIVEEN

LIMERICK

Riverside House Dan Spring Road Tralee Co. Kerry

Beech Tree House Market Street Killorglin Co. Kerry

Cresent House Hartstonge Street Limerick

Phone: +353 66 7126333 Fax: +353 66 7124546 Email: info@psc.ie

Phone: +353 66 9761275 Fax: +353 66 9761960 Email: info@psc.ie

Phone: +353 61 319603 Fax: +353 61 319541 Email: info@psc.ie

www.psc.ie