Syndicated News Archives - Page 4 of 312 - Kelly Rahill Accountants

Revenue’s PAYE changes will see end of P60

Revenue has today outlined what it has described as the most significant changes to the tax system since 1960 when PAYE was introduced.

The changes are intended to make tax matters easier for the general public by removing much of the paperwork that normally goes in tandem with paying tax. 

The new system will result in the removal of the P45 and P60 systems in the coming weeks and their replacement with a “real time, comprehensive financial summary” of a person’s employment history.

Revenue said the new system will result in significant benefits to the public.

These benefits include greater transparency about the taxes people are paying through their salary, greater transparency to ensure employers are paying the taxes they should and improved access to tax rebates and medical refund claims during the year

The P60 – a certificate detailing total pay and deductions including PAYE, PRSI and the Universal Social Charge – is being replaced by an Employment Detail Summary. 

In preparation for the changes, employers have been providing reports on a worker’s income and statutory reductions to Revenue every time they get paid so they have been building up a real time update of taxes paid. 

By registering for and using the MyAccount option on the Revenue website, PAYE workers can view their deductions as they happen.

They can also make claims for tax refunds, for which there is a four year time limit.

Over 181,600 employers made 6.1 million payroll submissions, reporting gross pay and pensions of over €98 billion in 2019, Revenue said today. 

The total Income Tax, USC and PRSI paid to the Exchequer for 2019 was €31.6 billion. 

Ruth Kennedy, Revenue’s Project Manager for PAYE Modernisation, said the scraping of the P60 is the biggest change to the “pay as you earn” system since the 1960s. 

Ms Kennedy said the changes will ensure people pay the right tax at the right time and get the full benefit of their entitlements throughout the year. 

She also said the changes to the system means that people will be less likely to pay emergency tax if they change job, because employers will be able to access real time tax credits.

The changes will not be more expensive for employers and 89% of surveyed employers said that the new measures make it easier for them, Ms Kennedy added. 

Announcing headline results today, Revenue said it collected total net receipts of €73.9 billion in 2019.

This included €58.4 billion in taxes and duties for the Exchequer and €15.5 billion on behalf of other Departments, agencies and EU member States.

Along with increased Exchequer receipts, Revenue also reported continued very high levels of timely, voluntary compliance.

It said this reflected the fact that the vast majority of taxpayers do the right thing and pay the right amount of tax, on time.

Revenue Chairman Niall Cody said that Revenue is very conscious of the need to support taxpayers to be voluntarily compliant by providing quality service in a timely, cost effective way. 

“We acknowledge and appreciate the engagement of taxpayers, and that of tax practitioners and agents, in the very strong compliance that was a feature of the year just gone,” Mr Cody added.

On Brexit, Mr Cody said that Revenue’s Brexit preparedness and contingency planning is strongly focused on supporting and helping businesses to plan and prepare for the UK leaving the European Union. 

Revenue appointed 586 staff to Brexit-related roles last year. 

“We had significant engagement with businesses that trade with the UK, writing to over 103,000 businesses with Brexit preparatory advice, and contacting almost 29,000 business via telephone,” Mr Cody said. 

“As a result of these engagement programmes, there was a significant increase in customs registrations with over 24,100 businesses acquiring an Economic Operator and Identification (EORI) number in 2019,” he added.

A EORI number is the minimum requirement for businesses to be able to move goods to, from or through the UK after Brexit.

During 2019, Revenue also completed over 567,000 compliance interventions, which yielded €547.6m.

It also seized 259 unlicensed gaming machines, settled 127 tax avoidance cases yielding €29m and secured 15 criminal convictions for serious tax evasion and fraud. 

It published 214 tax settlements in the List of Tax Defaulters and Mr Cody said Revenue continues to target and disrupt all forms of “shadow economy and illegal activity”. 

Last year Revenue seized over 13 million cigarettes worth €8.5m and 3,229 kilos of drugs with an estimated value of over €23.5m.

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Mortgage approvals up in November; BPFI

Nearly 4,200 mortgages were approved in the month of November, according to figures from the Banking and Payments Federation.

It was down around 7.5% on the approval numbers in October, but up 2% on November of 2018.

In value terms, it amounted to €960 million in November.

That measure was also down month-on-month, but up on the year.

There tends to be a slowdown in the mortgage market as the year comes to an end, but the figures point to continued buoyancy.

First time buyers once again accounted for the bulk of the activity. 

Just over half of the mortgages were issued to this cohort with movers accounting for just over a quarter of the approvals.

There was a fall off in activity among those remortgaging or switching mortgage providers. Approvals in this cohort were down over 11.5% on November of last year and 3% on October.

“While mortgage approvals for November were down on the previous month, this was expected due to the seasonal effect that we typically see in the latter stages of the year,” Brian Hayes, CEO of the Banking and Payments Federation said. 

“Looking at the recent underlying trends, approvals grew both in volume and value terms year-on-year with the First-time buyer segment showing consistent growth and this continues to be a key driver of the market.”

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Corporation tax to boost Exchequer figures for 2019

Exchequer figures to be released later today are expected to show a surplus of €1.5bn for last year.

The surplus is mainly due to higher than forecast levels of corporation tax on company profits.

The forecasts for corporation tax were revised upwards three times in 2019.

The final figure is expected to be €1.4bn ahead of expectations.

It is the main factor behind a surplus in the public finances expected to be 0.4% of GDP or €1.5bn for 2019 as a whole.

This will bolster the Exchequer going into this year and will help reduce, over time, the overall level of public borrowing.

Last month, Minister for Finance Paschal Donohoe announced his intention to continue to run budget surpluses over the next several years.

The budget watchdog, the Irish Fiscal Advisory Council, has been critical in the past that bumper corporation tax receipts were used to fund current spending and not put aside as surpluses.

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Mild downturn in manufacturing continues in December

The final AIB PMI survey of Irish manufacturers for 2019 revealed a further deterioration in business conditions in December. 

The extent of the downturn remained mild, with new orders and employment only fractionally lower than in November. Exports remained the main drag on total new orders, linked to a weak UK market. Output was cut as firms sought to address a build-up of unsold stock. More positively, expectations continued to recover from September’s low.

The headline AIB Ireland Manufacturing PMI is a composite single-figure indicator of manufacturing performance. The PMI edged lower to 49.5 in December, from 49.7 in November.

The latest sub-50 reading indicated an overall deterioration in manufacturing business conditions for the sixth time in the past seven months, the longest downturn since the second half of 2011 through to early-2012.

That said, the overall downturn remained mild, with new orders and employment only fractionally lower than in November. A sharper fall in output and lower new business were mostly offset by the greatest lengthening in suppliers’ delivery times in seven months.

Oliver Mangan, AIB Chief Economist, commented: “Weak export demand, especially out of the UK, continues to weigh on Irish manufacturing activity according to the latest PMI data. The AIB Irish Manufacturing PMI came in at 49.5 in December, marginally down from its level of 49.7 in November. The index, though, averaged 50.0 for the fourth quarter as a whole, consistent with stagnation in the sector. This was up from the third quarter average of 48.7.

“The stand-out feature of the December data is the marked decline of new export orders. These have contracted at a significant pace right through the second
half of 2019. Yet again survey respondents called out the weakness in orders from the UK in particular, where Brexit related uncertainty is weighing on demand.

The volume of new orders received by manufacturers fell in December, following a two-month spell of marginal growth.

That said, the rate of contraction was weak, and slower than those registered from May to September. The overall reduction mainly reflected weak exports, mainly linked by firms to the UK market. New export orders fell for the sixth month running, and at the second-fastest rate in over ten years.

Lower incoming business led to a further cut in production in December, the sixth in eight months. The rate of decline accelerated slightly since November as firms attempted to control rising stock levels. Inventories of finished goods increased for a survey record-equalling seventh month running, and at the fastest rate since August.

The Irish manufacturing workforce was cut for the second month running in December, the first consecutive decline since March-May 2013. That said, the rate of job shedding was only marginal and eased since November.

With subdued demand conditions at the end of 2019, manufacturers exercised caution with regard to purchasing activity. Input volumes fell for the seventh time in eight months, and stocks of purchases were cut at the strongest rate since March 2017.

Manufacturers’ purchase prices continued to rise in December, extending the current sequence of increases to 44 months, the second-longest in the survey history. 

Greater cost pressures were partly attributed to the recent strengthening of sterling against the euro. That said, the rate of inflation eased to the second-weakest since July 2016, remaining well below the long-run survey average.

Average prices charged for manufactured goods rose for the third month running in December, reversing a continuous decline during the third quarter of 2019. The rate of output price inflation was little-changed from October and November, and slightly above the long-run series average.

The survey’s forward-looking Future Output Index, which tracks manufacturers’ expectations for production over the next 12 months, improved further from September’s low in December. Around 42% of survey respondents expect output growth at their units, with overall sentiment the strongest since June. 

Companies linked positive forecasts to new products, improving US and European demand and reduced Brexit uncertainty. That said, the Future Output Index remains well below its long-run trend (71.8), and the 2019 average (67.6) is the lowest for any calendar year since the series began in 2012.

Mr Mangan said, “The softness in overseas demand is resulting in an ongoing fall in order backlogs and a build-up of stocks of finished goods. Firms have responded by cutting production levels and shedding jobs. Employment in manufacturing declined for the second month in a row in December, albeit very marginally. 

“The Irish December PMI reading of 49.5 remains well above the flash PMI for the Eurozone, which is put at 45.9, and the level of 47.4 in the UK, as the stronger domestic economy helps support activity here. On a positive note, confidence among Irish manufacturers regarding future output rose to a six-month high in December, suggesting that firms expect activity to pick up in 2020.”

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Euro gains and sterling shines as growth optimism cheers investors

The euro, the pound and some trade-sensitive currencies rallied as the dollar slid to a six-month low today.

Investors are confident that global growth prospects are improving and that US-China trade relations are getting significantly better. 

After staying strong for much of 2019 thanks to the relative outperformance of the US economy and investors’ preference for a safe-haven currency amid the trade dispute between Washington and Beijing, the dollar’s gains for the year have shrank in December. 

The buoyant end-of-year sentiment enocouraged investors to buy up currencies linked to trade and global growth.

This sent currencies such as the Australian dollar, Chinese yuan and Scandinavian crowns to multi-month or multi-week highs against the greenback. 

The dollar index was last down 0.3% at 96.435, its weakest since July 1. 

In thin volumes on the last day of the decade, currencies were also more volatile than many had expected.

Analysts did not attribute the moves to any specific new developments. 

“I can’t see much reason for the movement in the FX market except end-year position squaring, or just being careful and cutting positions ahead of the New Year’s holiday and the start of 2020. As a result I wouldn’t draw any big conclusions from it,” said Marshal Gittler, currency analyst at ACLS Global.

Chinese Vice Premier Liu He will visit Washington this week to sign a Phase 1 trade deal with the US, the South China Morning Post reported earlier this week. 

White House trade adviser Peter Navarro said the trade deal would likely be signed in the next week, but that confirmation would come from President Donald Trump or the US trade representative. 

Investors’ appetite for risk helped drive the euro up 0.3% to $1.1230, a new four and a half month high.

Signs that the euro zone economy may be stabilising have lifted the common currency in recent weeks as investors unwound short positions, though the currency has shed around 2% of its value against the dollar in 2019. 

Meanwhile, sterling hit new two-week highs against the dollar.

However, the possibility of a ‘no-deal’ Brexit at the end of 2020 means the currency is still not close to where it was on December 12, the day Prime Minister Boris Johnson won the British election. 

The pound galloped 0.8% to as high as at $1.3212 and was 0.5% stronger against the euro at 85 pence. 

Sterling has gained around 3.5% against the dollar in 2019 and 5.4% compared to the euro as fears of an imminent disorderly exit from the European Union eased and then lifted with the passing of Johnson’s Brexit withdrawal agreement in parliament.

The US dollar was weak across the board, cutting 2019 gains for the index that tracks the greenback against a basket of currencies to 0.3%.

MUFG analysts saw a “bearish technical development for the US dollar that signals an increasing risk of further weakness ahead”.

“Weakness in the US dollar towards the end of this year has coincided with the renewed expansion of the Fed’s balance and the paring back of pessimism over the outlook for global growth,” they said. 

Against the Japanese yen, the dollar fell to a near three-week low of 108.50 yen and was last down 0.4%.

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Gold set for best year since 2010 on weak dollar

Gold rose to its highest level in more than three months today, capping its best year in nearly a decade, on a weakening dollar and year-end buying in thin-volume trading. 

Spot gold hit its highest since September 25 at $1,524.20 and was last up 0.5% to $1,522.89 per ounce. US gold futures rose 0.4% to $1,524.70. 

Bullion is set to post its best year since 2010, having gained nearly 19%, mainly driven by a tariff war between the world’s two largest economies and quantitative easing by major central banks. 

“One of the main drivers behind gold’s gain is the weakening in the dollar,” said Margaret Yang Yan, a market analyst at CMC Markets, adding prices are also rising on bargain hunting in year end. 

The dollar .DXY slipped against a basket of rivals, making gold cheaper for holders of other currencies. 

“However, the upside is kind of limited because quantitative easing or rate cutting cycle has come to an end for now and we don’t see a possibility of any rate cuts in 2020,” Yan said. 

The US Federal Reserve cut interest rates three times this year before agreeing to pause. Lower interest rates reduce the opportunity cost of holding the non-yielding bullion. 

On the trade front, a Phase 1 deal was likely to be signed next week, White House trade adviser Peter Navarro said yesterday.

Meanwhile, palladium rose 0.2% to $1,910.31 per ounce. Plagued by sustained supply deficit, it was the biggest precious metal gainer this year with a gain of over 51%, its best since 2017. 

The price of the metal, used mainly in catalytic converters in vehicles, rose to a all-time peak of $1,998.43 on December 17. 

Silver rose 1.1% to $18.12, and was poised to register its best year since 2010, rising about 17%. 

Platinum gained 1.4% to $971 and for the year was set to gain about 23%, its best since 2009.

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Oil prices slip but on track for biggest yearly rise since 2016

Oil fell on the last trading day of 2019 but was still on track for monthly and annual gains, supported by a thaw in the prolonged US-China trade row and Middle East unrest. 

Brent crude was up 11 cents at $66.78 a barrel this afternoon, while US West Texas Intermediate (WTI) crude rose six cents at $61.74 per barrel. 

The volume of trade remained low as many market participants were away for end of year holidays. 

Brent has gained about 23% in 2019 and WTI has risen 34%. 

Both benchmarks are set for their biggest yearly gains in three years, backed by a breakthrough in US-China trade talks and output cuts pledged by the Organization of the Petroleum Exporting Countries and its allies.

Signs of progress in the talks between the US and China and the likelihood of signing a trade deal as early as next week boosted factories’ output and Chinese manufacturing activity expanded for a second month in a row. 

China’s Purchasing Managers’ Index), an index showing economic trends in the manufacturing and service sectors, was unchanged at 50.2 in December from November, but still remained above the 50-point mark that separates growth from contraction. 

Tensions in the Middle East also kept traders on edge as thousands of protesters and militia fighters gathered outside the US embassy in Baghdad to condemn US air strikes against Iraqi militias.

Security guards inside the US embassy fired stun grenades at protesters and the US ambassador and other staff were evacuated due to security concerns. 

The US strikes could pull Iraq further into the heart of a proxy conflict between the US and Iran. 

“Considering that Iraq is the second largest OPEC producer with production around 4.6 million barrels per day, market participants may add a risk premium to oil tension if tensions last for longer,” UBS oil analyst Giovanni Staunovo said. 

“That said, we need to see if the latest protests spread also in the south of the country, where most of the crude is exported,” he added.

Oil prices are likely to hover around $63 a barrel next year, a Reuters poll showed today, benefiting from deeper production cuts by OPEC and its allies, and hopes that a US-China trade deal could jumpstart economic growth. 

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Housing prices see first annual fall since 2012

Housing prices saw their first annual fall since 2012 this year, the latest Sales Report shows today.

Housing prices fell by 1.2% during 2019, with the average price nationwide in the final quarter of the year standing at €250,766.

This was 2.4% lower than in the third quarter and 1.2% lower than a year ago, said. 

The reports shows that Dublin home prices fell by 1.2% this year, while Galway city prices were unchanged on 2018. 

In the other main cities, housing prices were higher, with year-on-year increases of 0.8% in Cork, 2.9% in Limerick and 3.3% in Waterford. 

Prices were also falling in areas other than cities, with prices down by between 0.8% in Munster and 2.6% in Connacht-Ulster, the report added. also noted that the number of properties available to buy on the market nationwide was just under 22,500 in December, down almost 5% year-on-year. 

It said that after almost a year and a half of improving availability, this marks the fourth month where stock on the market has fallen. 

Commenting on today’s report, Ronan Lyons, economist at Trinity College Dublin, said the decade had started with rapidly falling prices and closed with gently falling ones.

The economist said that over the last ten years, the sales segment of the housing market has transformed, albeit slowly. 

“As it enters the 2020s, there appears to be relatively good balance between the pipeline of newly built owner-occupied housing and the number of households able to buy that housing, given constraints such as the mortgage rules,” he said. 

“Where falling prices represent the ability of developers to build new homes for less, this fall is good for the country’s competitiveness,” he added.

But the economist cautioned that the country’s housing system is far from healthy, as huge issues with the other segments of the system, including private rental and social housing, remain. 

“In addition, a huge mismatch exists between the existing stock of housing, which is predominantly for households of three or more persons, and the country’s housing needs, with one and two person households not only the majority of households already but also accounting for the overwhelming majority of new households the country will add over coming decades,” he added. 

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Euro boosted by US-China trade news

The euro hit a four and a half month high today as optimism over US-China trade relations and the global growth outlook knocked demand for dollars. 

Thin end-of-year volumes exacerbated the broad weakness in the greenback, which has seen it dip for three sessions in a row and on Friday suffer its biggest one-day fall since June. 

Investor sentiment, which has discouraged buying of the dollar as a safe haven, was boosted during Asian hours when China’s central bank unveiled a measure to help lower borrowing costs and boost flagging economic growth.

Investors also cheered a report forecasting that China’s 2019 retail sales would be up 8%. 

The euro climbed as high as $1.1211 today, its strongest level since August 13. 

Bleak European economic data had prompted hedge funds to bet on a weaker euro during 2019, but some signs that the euro zone economy has turned a corner have lifted the EU single currency in recent weeks. 

The dollar index, which measures the currency against a basket of rivals, weakened 0.1% to 96.821. With Friday’s loss, the index’s gains for the year have shrunk to around 0.6%. 

Sterling was also a beneficiary, rising 0.2% to $1.3106. 

Against the euro, it was down 0.1% at 85.51 pence – concerns that Britain is headed for a disruptive “hard Brexit” at the end of 2020 have hurt the pound since the middle of December. 

Marshall Gittler, chief strategist at ACLS Global, said it was noticeable how little currencies had moved during 2019, with very low volatility and narrow trading ranges, which he put down to “economic and monetary policy convergence”. 

“I expect less of both in 2020, for two reasons,” he said, noting the expected end of the Sino-US trade war, which should lead to broader economic recovery across the world. 

The second reason, Gittler said, was that inflation seemed to have bottomed out and “conceivably some countries could start thinking about hiking rates, which would encourage monetary policy divergence”. 

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Business sentiment rises for third month in a row – Bank of Ireland Economic Pulse

Business sentiment rose for the third consecutive month in December, while consumer sentiment remained steady, the latest Bank of Ireland Economic Pulse shows. 

The Bank of Ireland Economic Pulse, which combines the results of the Consumer and Business Pulses, showed a reading of 83 in December. 

This was up 2.3 on November’s reading but 5.4 lower than a year ago. 

The latest Economic Pulse shows that the majority of firms do not expect to change their selling prices in the months ahead, even though two in five reported a rise in non-labour input costs. 

On the consumer front, three in four households said they are likely to put money aside over the coming year and there was greater confidence across all regions for future house price gains.

Dr Loretta O’Sullivan, Group Chief Economist for Bank of Ireland, said that while sentiment rose in December, the Economic Pulse ended the year below where it started it. 

“2019 has been a year of intense Brexit drama and political events across the Irish Sea were to the fore again this month, with the UK in the midst of a general election campaign as the December survey was being carried out,” Dr O’Sullivan said. 

“Business sentiment rose for the third month in a row, while consumer sentiment moved sideways, as households remain cautious,” she added.

Bank of Ireland said its Business Pulse stood at 84.6 in December, up 2.8 on last month but down 3.5 on a year ago. 

It said that while the headline index rose for a third month in a row, the picture was mixed across the sectors with the services and construction sectors posted firmer readings and the industry sector eased back along with the retail sector. 

Bank of Ireland said that Brexit developments will continue to be important for business investment, which has been impacted by uncertainty. 

Meanwhile, the consumer element of the survey was more or less flat on the month but down 12.9 on a year ago.

Bank of Ireland said that households’ assessment of the general economic situation and their personal finances was little changed in December as they waited to see where the Brexit process goes next. 

The buying and savings climate also held steady, with three in ten considering it a good time to purchase big ticket items such as furniture and electrical goods.

74% of consumers also indicated that they are likely to put some money aside over the coming year.

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