Practice News Archives - Page 5 of 14 - Kelly Rahill Accountants

Setback for banks as tender for new credit bureau goes overseas

The Central Bank has chosen Italian credit checker CRIF as the preferred bidder to operate the new central credit register, the Irish Independent understands.

Early last week, the Bank chose the Italian company ahead of rivals including the Irish Credit Bureau (ICB).

The ICB, owned by the major Irish banks as well as credit card providers and credit unions, is the major credit checking agency in this country but is not backed by the State.

The ICB applied for the tender but was notified on December 3 that its bid was unsuccessful.

“ICB accepts the decision by the CBI (Central Bank of Ireland) to award the tender to another bidder,” an ICB spokesman said.

“While ICB notes this outcome the company will continue to provide credit reference services to Irish financial institutions.” Read more

Government asks Central Bank to ease mortgage deposit rules

THE Government wants the Central Bank to ease the introduction of strict new rules on mortgage borrowing by introducing the changes gradually.

In a submission to the Central Bank which will be lodged today, the Department of Finance will offer broad support for the regulator’s controversial plan to tighten the lending rules while calling for more flexibility in some areas. The regulator asked for suggestions after stunning the property market by revealing that it wants most first-time buyers to save at least 20pc of the cost of a house.

Finance Minister Michael Noonan will specifically say that he wants the Central Bank to introduce a transition period for the changes, rather than forcing borrowers to raise more money from next month. Mr Noonan also wants more people to be exempt from the rules. The Central Bank has said it believes 15pc of people should be exempt from the ban on borrowing more than 80pc of a mortgage.


Finally, the submission urges the Central Bank to focus more on loan-to-salary ratios and less on loan-to-value ratios. The Central Bank said in October than it wants to ban loans of more than three-and-a-half times salary

The Central Bank will begin sifting through submissions tomorrow, but Governor Patrick Honohan has already signalled that he may water down some of the measures.

The Department of Finance has waited until the last moment to issue its submission on the Central Bank proposals; the deadline for submissions closes today.

A group campaigning against the changes will deliver a petition to the Central Bank today. The new group, called Uplift, claimed yesterday the rule will cause more problems than it solves.

The Professional Insurance Brokers Association warned last week that the consequences of the Central Bank’s proposals to restrict mortgage lending will be “far more far-reaching than many realise”. Rachel Doyle of PIBA said: “It will impact young people’s ability to make any other contribution towards their financial future, including prudent pension planning, quite apart from using up, at a very early stage, tax-free family inheritances.”

Ms Doyle said the way in which the Central Bank consultation document is framed “leads one to become suspicious, despite recent indications from the governor, that the regulations are already drafted and are, in fact, a fait accompli”.

A spokeswoman for the Central Bank said the proposed requirements on deposits and the proposed stipulation that lending cannot exceed 3.5 times income are part of a consultation process. “When the consultation closes we will review all submissions and we will not comment on responses until after that time,” she added.

Article Source:

European stocks fall after Draghi stalls on stimulus

European stocks fell after European Central Bank president Mario Draghi said it will assess the need for further stimulus early next year, putting an end to speculation that it would take more immediate action.

Hopes that the central bank would embark on a government bond-buying scheme have been fuelling a strong rally in European shares in the past few weeks. The ECB also lowered its forecasts for euro zone inflation and gross domestic product through 2016. Banks, mining stocks and energy companies all declined.

The Dublin market went against the general trend, as Ryanair’s share price soared and sent the Iseq index to its highest level since June 2008.
The Iseq index gained more than 1 per cent, lifted by a surge for Ryanair, which closed up 8.4 per cent at €9.45 after it raised its full-year profit forecast for the third time this year.

Insulation-maker Kingspan also had a good day, advancing 4.2 per cent to €13.76, while there were also gains for paper and packaging group Smurfit Kappa and Aer Lingus, which finished up 2.5 per cent at €1.79 on a good day for travel stocks across Europe.

Building materials group CRH, the largest stock on the index, was relatively flat at €19.69. C&C fell 1.75 per cent to €3.67. Investec, the specialist bank and asset manager, has won the joint mandate to be broker to C&C, along with Davy Stockbrokers. This mandate had been previously held by Davy with Goldman Sachs, the international investment bank.

Independent News & Media closed flat at 14 cent. Analysts at Davy Research raised forecasts for the stock on the back of a recent trading statement it described as “encouraging on a number of fronts”.

The FTSE 100 lost 0.6 per cent after Draghi’s statement. Separately, the Bank of England kept its key interest rate unchanged at a record-low 0.5 per cent, as forecast by economists.

As Ryanair led a rally for travel companies, EasyJet gained 2.9 per cent to 1,716 pence after saying the number of passengers increased in November from a year earlier, while TUI Travel added 3.6 per cent to 444 pence after reporting that full-year underlying operating profit rose.

Miners and energy companies fell as Brent crude oil prices stayed below $70 per barrel. Anglo American declined 2.8 per cent to 1,283.5 pence after Bank of America recommended selling shares of the iron-ore producer. Rio Tinto Group dropped 2.6 per cent to 2,933.5 pence. Royal Dutch Shell was also lower at 2,229 pence.

Stocks sank across most of the major markets, with France’s Cac 40 index losing 1.6 per cent and Germany’s Dax dropping 1.2 per cent. Of the 18 western- European markets, Italy’s FTSE MIB Index and Spain’s IBEX 35 Index declined most, falling more than 2 per cent.

Spain’s Banco Santander lost 3.2 per cent and France’s BNP Paribas dropped 2.3 per cent, as market-watchers concluded investors had expected more than the ECB was able to deliver. Airlines had a good day, with Air France-KLM rising 1.6 per cent and Deutsche Lufthansa up 1.1 per cent. The sector has been one of the winners of the recent drop in oil prices.

US stocks were little changed at the midway point of the session, bouncing from initial losses after the ECB brushed off pressure for more immediate monetary policy action.

Chevron slid 1.2 per cent as energy shares tumbled the most among S&P 500 groups. Crude oil prices fell 18 per cent last month as the Organisation of Petroleum Exporting Countries maintained its output target, letting prices fall to a level that may slow US production growth. Microsoft rose 1.6 per cent as bookseller Barnes and Noble said it will buy back the company’s stake in its Nook business, which posted a loss that pulled down the US chain’s second-quarter results. Barnes and Noble fell 5 per cent.

Article Source:

New forecasts from ECB cuts eurozone growth outlook to 1pc

The European Central Bank (ECB) left official interest rates unchanged and at an all time low on Thursday, good news for householders with tracker mortgages.

But, ECB president Mario Draghi issued new forecasts cutting the eurozone’s growth outlook for next year to just 1pc from the 1.6pc predicted three months ago.

Despite that, the ECB chief said he will wait until early next year to assess whether more action is to revive the economy.

The ECB’s Governing Council voted unanimously to take action that could include buying government bonds, if necessary, Mr Draghi told a news conference. “Should it become necessary to further address risks of too prolonged a period of low inflation … this would imply altering early next year the size, pace and composition of our measures.”

And he said that the slump in oil prices will help the eurozone, which is struggling to recover from the financial crash even though the UK and US have powered ahead.

Article Source:

ECB weighs further action as economic picture darkens

The European Central Bank will make plain the euro zone’s economic malaise after it meets today, with a rare public call from Washington adding to pressure for action to stop the bloc going into reverse.

With recovery stalled across many of the 18 countries that share the euro, ECB president Mario Draghi will present fresh growth and inflation forecasts from bank staff at his post-meeting news conference. Both measures are likely to be downgraded further.

Mounting concerns about the euro zone economy were underlined by the US Federal Reserve’s influential vice chair, Stanley Fischer, who broke with etiquette to say that money-printing would help Europe as it had the United States.

“If the ECB moves in that direction, it will have positive effects,” Mr Fischer, who was Mr Draghi’s academic mentor at university, told a newspaper in Italy. But Mr Draghi faces considerable political obstacles to taking this step, chiefly from a reluctant Germany.

Last week, Sabine Lautenschlaeger, Germany’s appointment to the ECB’s Executive Board, said that now was not the time for state bond buying. So while the ECB could extend a scheme to buy secured debt to include corporate bonds, it is unlikely he will announce any money printing to buy government bonds.

Economists, roughly half of whom expect the bank to start buying government bonds – a step that should buoy the economy when banks exchange bonds for

ECB cash – have pencilled this in for the first three months of next year.

ECB vice-president Vitor Constancio has said the bank will be better able to gauge then whether it needs to buy such debt.

Other major central banks including the Fed, Bank of Japan and Bank of England, have already used quantitative easing to stimulate their economies. But divisions between debt-shy euro zone countries such as Germany and southern states including Greece make such a step more difficult for the ECB.

Germany, the bloc’s biggest economy by far and its most influential, fears it would encourage reckless borrowing. “The euro zone needs growth and jobs to ensure that it survives,” said Lena Komileva of consultancy G+ Economics, warning of the obstacles to so-called quantitative easing. “Germany’s strong opposition … raises questions about its ability to act fast enough.”

Mr Draghi will address the press for the first time in the ECB’s new €1.3 billion headquarters in a Frankfurt skyscraper. Just yards away from the imposing building, designed to show the strength of the currency, labourers queue up for a day’s work. But the bloc is in a delicate situation.

Euro zone inflation, a key yardstick of the economy’s health and viewed by investors as a trigger for the ECB to buy government bonds, slowed to just 0.3 per cent last month. If prices were to start to falling, as they already have in some countries, that could discourage consumers from shopping while they wait for goods to get cheaper, creating a vicious circle that pulls down the economy.

A conflict in Ukraine, which has frozen much of EU-Russian commerce, a slowdown in momentum in China and war in Syria add to the gloom, as does the tumbling price of oil. The ECB has already cut borrowing costs to record lows, given cheap loans to banks and started buying repackaged loans to kick-start lending.

Article Source:

Consumers urged to ‘think twice’ about moneylending loans this Christmas

The Central Bank is urging consumers to “think twice” before taking out additional loans from moneylending firms this Christmas.

“Households often have additional expenses at this time of year, and consumers could be tempted to take out additional loans to cover these expenses, including from moneylending firms,” said Bernard Sheridan, director of consumer protection with the Central Bank, warning that “this could take consumers into a rolling cycle of high-cost borrowing and potential debt, especially given the high-cost nature of moneylender loans, when compared with loans from banks and credit unions.”

Last year, research from the Central Bank showed that one in five consumers (21%) took out a new loan before another loan was paid off. Of these, 27 per cent claimed that they had used their new loan to reduce an existing loan, even though this is prohibited.

Moneylenders typically apply little credit checks when lending money and are legally entitled to charge interest of in excess of 200 per cent in Ireland, although the Central Bank does impose a limit. Provident Personal Credit for example, can charge a rate of up to 187.2 per cent. This means that a €500 loan over 26 weeks will cost €650 to repay.

“If a consumer does choose to take out an additional loan from a moneylender they should check that the moneylender is licensed by the Central Bank. Moneylenders licensed by the Central Bank are prohibited from keeping any amount of a new loan to repay an existing loan,” Mr Sheridan said.

He also urged consumers to remember that if they run into difficulties repaying a loan, moneylenders cannot charge you extra.

“However, if you find yourself having difficulties managing your money, contact the Money Advice and Budgeting Service who offer free budgeting advice and will help you manage your debt,” he said.

You can check if a moneylender is authorised by the Central Bank by checking its registers here.

On Monday Provident was fined €105,000 by the Central Bank for breaches of the legislation relating to certain moneylending practices.

Following an investigation, the bank found, that in relation to 117 loans provided out of the moneylender’s Letterkenny office between 2009 and 2012, the firm failed to advance the full amount of the loan to those consumers that they had entered into agreements with. The bank said some of the new loans were deducted and used to repay outstanding amounts on loans which had previously been provided to consumers.

Article Source:

Surge in jobs key to €1.1bn extra tax for State coffers

Finance Minister Michael Noonan declared it was “a good year for tax” as new figures show the State taking in €1.1bn more than predicted this year.

However, the minister’s pleasure at a bumper tax take risks raising the hackles of voters ahead of the arrival of water charges.

And it will also put pressure on the Government to provide greater levels of relief to hard-pressed families.

The surge in tax is being attributed to a higher income tax take due to the increased numbers of people at work. Almost half of a €3bn rise in revenue is from income tax.

There is also a surge in taxes paid by the self-employed and companies.

November’s data is regarded as especially important because it includes the bulk of taxes paid by businesses and the self-employed.

The budget deficit for the year is now €1.8bn better off than had been expected when Budget 2014 was delivered.

The latest figures suggest there will be more room to ease back on taxes and loosen spending next year, and appear to bear out the decision not to opt for deeper cuts in Budget 2015 back in October.

Analysts hailed the figures as a sign of Ireland’s continuing recovery, and Mr Noonan (inset) said we were already beating targets set in Budget 2015, just weeks ago.

“(The numbers) are pretty strong, November is a very big tax month. They’re ahead of profile. So far it’s been a very good year for tax. With 11 months gone, not only are we ahead of last year’s Budget, but we’re ahead of this year’s Budget,” Mr Noonan said.

But while the data shows VAT is 3pc above target over the year so far, it is 2.1pc, or €31m, lower than expected in November.

“The figures for VAT, which reflect activity in September and October, indicate a cautious return to spending,” said tax expert Peter Vale of accountancy firm Grant Thornton.

“In the early months of next year it will be interesting to track whether the first income tax cuts in many years translate into greater spending. For many taxpayers, particularly those on tracker mortgages, the combination of lower income taxes and lower mortgage payments will mean significantly enhanced purchasing power next year.

“This should provide much-needed impetus to the domestic economy,” he added.

The data shows the tax take is €1.1bn better than expected for the year so far, with €122m more than expected brought in from income tax, and €312m more in VAT. Excise duties are €245m better than thought.

Corporation tax, which is paid on profits, came in €209m ahead of expectations, at €4.2bn for the first 11 months of the year.

Stamp duty receipts rose by 28pc on last year, while revenue from the local property tax rose by more than 50pc. Government expenditure fell by 1.4pc, fuelled by a sharp fall in interest repayments on debt.

Investec chief economist Philip O’Sullivan praised government plans to pay back €9bn of the money Ireland owes to the IMF early in order to save on interest repayments.

“The more debt that we refinance cheaply, the lower our interest costs, the better our public finances, the better our debt sustainability, and the more positive the market views Ireland,” he said.

But Mr O’Sullivan warned that health spending showed signs of indiscipline. Overspending on health totals €580m, although this is offset by savings in other departments, leaving current public spending at €262m over target.

The figures show Ireland’s budget deficit stands at €5.76bn. The deficit was €8.57bn at this time last year. Reducing, and eventually eliminating, the deficit is regarded as a mainstay of post-bailout policy.

Article Source:

Irish services sector keeps up robust pace of growth in November – PMI

Irish services sector activity expanded rapidly again in November, suggesting that the economy will finish the year with solid growth.

The Investec Purchasing Managers’ Index of activity in the services sector, which covers businesses from banks to hotels, inched up to 61.6 from 61.5 in October and was just short of June’s seven-year high.

The index has been above 60 for the past nine months and has not fallen below the 50-point line denoting growth since July 2012. The corresponding manufacturing survey marked a year-and-a-half of successive growth on Monday.

“Taken together with Monday’s manufacturing PMI Ireland report, this release is a reminder of the broad improvement in conditions across much of the Irish economy at this time,” Investec Ireland chief economist Philip O’Sullivan said.

“All four of the segments surveyed – business services, financial services, telecommunications, media and technology and travel and leisure – simultaneously recorded growth in business activity for a tenth successive month in November.”

The sub-index measuring new export business fell to a five-month low of 60.0 from 60.6 a month earlier, which O’Sullivan said was likely linked to deteriorating conditions in the euro zone.

But the employment index showed firms hired staff at the fastest rate in over eight years, and panelists attributed the latest increase in input prices to higher salary payments, with companies paying more to keep staff on.

Article Source:

German and British opposition could hurt plan to cut taxes for innovative companies – Finance Minister

Finance Minister Michael Noonan has signalled that German and UK opposition could hamper plans for a so-called “knowledge development box” announced in the Budget.

The scheme, which would cut taxes for innovative companies, will be implemented as part of next year’s Budget, the minister said, even though the so-called “double Irish” tax loophole it is supposed to replace expires next month.

The knowledge development box would allow companies generous tax breaks based on their intellectual property rights.

It is intended to encourage local companies to develop and sell products based on their patents and to attract the research and development units of foreign companies.

Germany and Britain said last month they will seek backing from other countries for a deal to ensure tax breaks based on patented research apply only in the country where the research and innovation takes place.

At a corporate tax conference organised by the Institute for International and European Affairs yesterday, Mr Noonan said it appeared qualifying for the tax break would be determined by whether a certain percentage of a company’s research and development staff worked locally.

“This approach on the one hand fits into Ireland’s core value of attracting substance,” he said.

“However, on the other hand, I do have concerns that such an approach, if designed too tightly, would have the potential to limit the scope for use by smaller countries.

“Would this represent a fair reform? I don’t think so. Further discussion is both planned and necessary.”

Meanwhile, Mr Noonan also said that he welcomed the Base Erosion and Profit Shifting (Beps) project from the OECD, but he said he has some concerns. He said Beps must not be about giving big countries advantages over small countries, and must not be used to single out US multinationals.

“If Beps took this course, it would be playing to the gallery and not be focused on real tax reform,” he said.

Mr Noonan also said he would welcome moves to allow Northern Ireland to lower its corporate tax rate to 12.5pc to better compete with the Republic.

It has been speculated that UK Chancellor George Osborne could announce the move in his autumn statement today.

Article Source:

Decision to end ‘double Irish’ loophole ‘extremely smart’

Leading OECD official says Government decision sent out positive message internationally.

The announcement by Ireland that it is ending the so-called “double Irish” tax structure was perceived as “extremely smart”, a leading official from the Organisation for Economic Cooperation and Development has told a Dublin conference on corporate taxation.

The director of the OECD’s centre for tax policy and administration, Pascal Saint Amans, said Ireland has been an extremely constructive participant in the organisation’s base erosion and profit shifting project (Beps), which is looking to draft new rules for global taxation.

He said that while drafting the proposed measures has been very complicated, the really difficult bit will be seeing they are implemented after they have been finalised next year.

He said the reason it had become a prominent international issue was because it was recognised that greater and better regulation of the international rules was needed. Otherwise the misuse of the international rules would lead to national governments introducing protectionist measures.
Heinz Zourek, director of the European Commission’s DG taxation and customs union, said the debate within the union about a Common Consolidated Corporation Tax Base (CCCTB) may be revived.
The commission’s proposals on a CCCTB are not considered by Dublin to be in Ireland’s interest as our low corporation tax rate is seen as key to attracting foreign direct investment here.

Mr Zourek said the new commission president, Jean Claude Junker, is interested in reviving the idea, but that before work on the proposal could resume, a clear political signal would be required.

The commission’s state aid inquiries involving Ireland, Luxembourg and the Netherlands moved up the current affairs agenda, he said, in the wake of the “Luxleaks” revelations, which had “an avalanche of reaction”.

He said that in recent years there had been remarkable change in relation to the issue of international cooperation and debate on tax.
He referred to national sovereignty in relation to tax matters as a “holy grail of autonomy” but pointed out that are community-wide codes on the non-introduction of harmful tax practices.
A recent letter from the finance ministers of France, Germany and Italy outlined, he said, how in their view the landscape for taxation had changed at European level and there needed to be broader debate.

The conference is organised by the Institute of International and European Affairs in association with KPMG. It is supported by McCann Fitzgerald and the media partner for the conference is The Irish Times.

Article Source: