Report to the Tánaiste & Minister for Enterprise, Trade &

Employment

High-Level Group on Business Regulation First Report

July 2008

An Roinn Fiontar, Trádála agus Fostaíochta Department of Enterprise, Trade & Employment

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Table of Contents

Chairman’s Introduction 3 1 Background 5

1.1 The Business Regulation Agenda 5 1.2 The Business Regulation Forum (BRF) 5 1.3 Submissions to the BRF 5 1.4 Business Workshops 6 1.5 The High-Level Group on Business Regulation 6 1.6 What are Administrative Burdens? 7 1.7 Approach of the High-Level Group 7

2 Outcomes To Date: Short-Term Actions 9 2.1 Introduction 9 2.1.1 Redundancy Payments Scheme 9 2.1.2 Audit Exemption 10 2.1.3 Tax Clearance Certificates 11 2.1.4 Companies Annual Return 11 2.1.5 VAT Registration Thresholds 12 2.1.6 Waste Collection Permits 13 2.1.7 Road Haulage Permits 13 2.1.8 Employment Permits 14 2.2 Summary of Administrative Costs and Savings 15

3 Outcomes To Date: Longer-Term Actions 16 3.1 Annual Returns to Revenue and CRO 16 3.1.1 Background 16 3.1.2 Issues Arising 16 3.1.3 Towards a Simplified and Simultaneous Process 18 3.1.4 Conclusions 19 3.2 Returns to Revenue and CSO 19 3.3 Reporting Financial Data - XBRL 20 3.4 ‘Single Window’ for Importing and Exporting 21 3.5 Unique Business Identifier 22 3.6 Data Strategy 22

4 Future Work Programme 24 4.1 High-Level Group – Rolling Agenda 24 4.2 Future Regulation 24 4.3 e-Government Solutions 25

5 Other Developments 26 5.1 European Commission Action Programme to Reduce Administrative Burdens 26 5.2 National Target for Administrative Burden Reduction 26 5.3 Consolidation of Legislation 27 5.3.1 Introduction 27 5.3.2 Company Law 27 5.3.3 Health and Safety Law 28 5.3.4 Employment Law 29 5.3.5 Customs Legislation 29 5.3.6 Financial Services 30

Appendix A 31 Membership of the High-Level Group 31

Appendix B 32 Specific Suggestions for Reducing Administrative Burdens in Ireland 32

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Chairman’s Introduction Tánaiste, I am pleased to present the First Report of the High-level Group on Business Regulation that covers the issues examined by the Group since it commenced work a year ago. By way of background to its work, the Group is fully conscious of the necessity for Government to regulate for the general welfare of society. Regulation is indispensable to society. It can be reactive or proactive, but should always be based on sound underlying policy objectives, such as protecting the environment, ensuring justice, promoting business and employment or improving the health and welfare of citizens. There is continuous demand for new or enhanced regulation. However, the burden imposed by regulation should always be proportionate. In recent times, Governments internationally have begun to challenge the cost of regulation, to both Government (and thus the taxpayer) and business, in terms of diverting resources that could be used more productively elsewhere. In particular, there has been a determined effort to reduce the ‘red tape’ factor, i.e. the administrative cost to business when making returns, completing applications, keeping records etc., in compliance with Government regulatory requirements. In both the USA and Europe there has been a concerted drive recently to reduce the red tape burden on business. In aiming to ensure the international competitiveness of the economy, Ireland, too, must guard against imposing avoidable cost on business. In addition to savings for business, cutting red tape should give rise to savings within Government Departments and Agencies. The ultimate goal in this regard is that regulating bodies would seek to ensure that regulation, where necessary, imposes the minimum administrative cost on business, and, in turn, promotes increased compliance. This is very much in keeping with the ongoing modernisation of our public service. The work of the High-level Group is focused on concrete measures in specific policy areas – Taxation, Statistics, Environment, Health & Safety and Employment & Company Law. The Group’s Report demonstrates how the objectives described above can be achieved and provides evidence that reducing administrative costs has widespread practical benefits. The working examples contained in the Report and the Group’s future work programme also demonstrate that, with some innovative thinking, the application of new technology and the use of tools to measure costs and benefits, real long-term efficiencies can be delivered. In addition to the focused work programme of the High-level Group, the Government has set a target to reduce the administrative burdens caused by national legislation by 25% by 2012, a process in which all Government Departments will participate. This target is in support of an EU-wide approach under which the European Commission has set a similar target in relation to EU legislation. Furthermore, the Government has decided that all new regulations should be subject to measurement of the administration costs to business with a view to keeping them to the minimum.

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Finally, I would like to emphasise two points. Firstly, it is important to highlight that the objective of this work is not to undermine necessary regulations but to ensure their efficient administration and to improve compliance. Secondly, imperative to the effective operation and continued impact of the work of the High-level Group, are the concrete and practical suggestions from the business sector, especially small business, and the views of the wider members of the Group. I would like to thank my colleagues on the Group for their valuable contribution in advancing this agenda and I look forward to their continuing support. Seán Gorman Chairman High-level Group on Business Regulation

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1.1

1.2

1.3

Background

The Business Regulation Agenda The High-level Group forms part of a programme of actions developed on foot of the Government’s agenda to improve the regulatory environment in Ireland. In summary, over recent years the business regulation agenda has evolved as follows: Action Programme for Regulatory Reform, Cutting Red Tape, 1999; OECD, Regulatory Reform in Ireland, 2001; Public consultation document, Towards Better Regulation, 2002; White Paper, Regulating Better, 2005; Regulatory Impact Analysis (RIA) Guidelines, 2005; Consultation Paper on Regulatory Appeals, 2006; ESRI Survey on Business Attitudes to Regulation, 2007; Business Regulation Forum (BRF), 2005-2007.

The Business Regulation Forum (BRF) The Business Regulation Forum (BRF) was established in November 2005 by the Minister for Enterprise, Trade and Employment, to advise on changes necessary to reduce the burden of regulation on business. The BRF included members from both Government Departments and business representative organisations and considered various ways in which regulation could be simplified for business. The Business Regulation Forum reported in April 2007. It recommended that a burden reduction programme should be introduced in Ireland and that a reduction of 25% in administrative costs could save Irish business of the order of €500 million annually. It recommended that the administrative burden reduction effort should concentrate on five priority areas of regulation: Taxation, Environment, Health & Safety, Statistics and Employment & Company Law. Based on an analysis of both national and international evidence, the Forum considered that these five areas may give rise to 80% of total administrative burdens.

Submissions to the BRF The Forum received approximately 40 submissions from interested parties during 2006. The submissions came from business representative organisations, businesses and individuals. Almost 300 recommendations were made. The majority were general recommendations with some relating to sectoral concerns. Apart from the specifics, a number of general themes emerged from the submissions received. The need for clarity and more detailed information on regulators and regulations was mentioned and the need for harmonisation of regulations and regulators was also an issue. There was a concern that inspections may be perceived

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as adversarial and it was suggested that enforcement should be ‘risk-based’, i.e. resources focused on where breaches were most likely to occur. Some submissions suggested more consultation during the legislative process, recommending Regulatory Impact Analysis (RIA) and Cost-Benefit Analysis for some existing regulations. The accountability of regulators and the need for stronger appeals procedures were also mentioned.

1.4

1.5

i

ii

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Business Workshops In May 2007, the Department of Enterprise, Trade and Employment conducted two workshops with business people, to provide an opportunity to discuss the most burdensome aspects of regulation from a business point of view. A number of key themes emerged. One was the cost of recasting data. Businesses stated that while they understood the need to provide data to Government, they found it frustrating to have to provide what seemed like the same information on numerous occasions, to various bodies, and in different formats. (In Sections 3.1 and 3.2 below, two major collaborative projects designed to reduce such duplication of effort are discussed.) Other suggestions from the workshops included recommendations for the simplification of a number of specified forms (which are on the High-level Group’s work programme), the suggestion that more support and information be used to encourage compliance, rather than strict enforcement, and some more sector-specific issues.

The High-Level Group on Business Regulation In response to the Report of the Business Regulation Forum, the Minister for Enterprise, Trade and Employment established the High-level Group on Business Regulation. The High-level Group acts as a forum for dialogue between business, trade unions and Government agencies. Its primary role is to act as a ‘clearing house’ for regulatory simplifications brought to its attention by business in relation to the five priority areas highlighted by the BRF. The Group’s terms of reference are:

To identify the administrative burdens placed on businesses, in particular small and medium-sized enterprises, arising from regulation or other administrative requirements, particularly in the areas of Taxation; Health and Safety Regulation; Employment Law; Environmental Regulations; Company Law; and Statistical Returns;

To determine ways to reduce and simplify administrative burdens and to eliminate them where they are unnecessary;

In cooperation with Government Departments, Agencies and Users, as appropriate, to measure the cost savings of the administrative burdens in the areas identified;

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iv

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1.6

To act as a ‘clearing house’ in addressing obstacles to the reduction of administrative burdens and associated costs; and

To report initially to Government before end July 2008.

A list of the Members is included in Appendix A.

What are Administrative Burdens? Administrative burdens are more commonly called ‘red tape’. A definition of administrative burdens can be approached by breaking down the costs of regulation into three components: financial costs, compliance costs, and administrative costs. Financial costs refer to things like paying taxes, dues, fees, charges or fines. Compliance costs relate to the activities required by the regulation, such as the purchase of equipment or the adoption of new procedures. Administrative costs relate to the Information Obligations (IOs), which include filling out forms and surveys, providing data or other information to public bodies or to third parties; it also includes requirements to keep information for later inspection. The distinction between costs and burdens is also important. An administrative burden is defined as relating to those Information Obligations (or parts thereof) that a business would not carry out unless required by legislation. What this means is that ‘Business As Usual’ costs are not counted as a burden if a normal business is likely to incur such costs even if not required by law to do so. Thus, for example, company accounts are likely to be prepared by businesses even if there was no regulation requiring it. Therefore, a large part of the administrative cost of preparing accounts would not be classed as a burden.

1.7 Approach of the High-Level Group In approaching its work the Group is concerned to ensure that administrative savings to business are effected without undermining the policy objectives behind the regulation. This means that the protections afforded to workers or the environment, for example, will not be weakened in any way as a result of reducing the cost to businesses of administering the regulation concerned. In fact, the Group believes that enabling regulations to be dealt with more efficiently by both businesses and the regulating authority would help to improve compliance and, therefore, make regulations even more effective. The initial approach of the Group was to examine specific issue under the five priority areas identified by the Business Regulation Forum and in the workshops held to identify the specific regulations which businesses find most onerous, burdensome or irritating. The Group revisited the submissions to the Business Regulation Forum, received during 2006, to identify concrete issues of concern to business. The listing of issues arising from both sources is contained in Appendix B and has been reviewed by the High-level Group. They can be categorised under a number of headings. Some were already under consideration or acted upon by other bodies;

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some are under consideration at present, either by the High-level Group or in other fora; and some, because they are matters of policy rather than administration, fall outside the remit of the Group. Through its work over the past twelve months, the Group identified a number of short term and longer-term actions which already had reduced or would, in the near future, reduce the administrative burden of Government regulations on business. In particular, the Group focused on measuring the costs to business and the savings that could be achieved.

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2.1

2.1.1

Outcomes To Date: Short-Term Actions

Introduction In keeping with its terms of reference, the High-level Group examined a number of concrete areas which would clearly demonstrate how administrative burdens on business could be reduced, resulting in cost savings to the business sector. Some of these measurements relate to reductions which came into effect since 1st January 2004 - the baseline for the national programme to reduce administrative burdens (see Section 5.2) and which is in keeping with the agreement at EU level. The methodology used by the Group to measure costs and savings was adapted from international best practice in the area. The approach was to survey a small number of representative businesses to determine the time taken when responding to an Information Obligation required by legislation. This is multiplied by an appropriate hourly wage rate and associated overheads to convert time into cost. Additional costs such as accountants’ charges, etc., were also added to complete the total cost. Multiplying this figure by the appropriate population of businesses (and annual frequency of the Information Obligation) gives the total administrative cost in the economy. The exercise focuses on that part of the administrative cost that can be considered a “burden” in the sense that businesses would not do it unless legally required to. During the survey stage, it is important to distinguish between “Business As Usual Costs” and “administrative burdens”. By focusing on administrative burdens, it is possible to arrive at a clear understanding of where regulatory simplification efforts may make a real and visible difference to business. This process can be carried out both to measure the progress that has been made in reducing burdens on business and also to identify where the larger burdens lie and which should be prioritised for simplification. The methodology employed by the High-level Group has, up to now, mainly been used to measure savings to business. However, the potential for efficiency improvements in the public sector is also significant. The example given in section 2.1.1 below, relating to simplification of redundancy payments, shows that significant administrative efficiency gains in regulating Departments and Agencies can derive from simplification efforts aimed at reducing burdens on business.

Redundancy Payments Scheme A project to improve the efficiency of the Redundancy Payments Unit in the Department of Enterprise, Trade and Employment went live in May 2005. The simplifications consisted of reducing the amount of paperwork involved for business, simplifying the necessary calculations and facilitating on-line applications. The simplifications had the effect of reducing costs to business. A measurement was carried out to estimate this cost saving and the research found that the average

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administrative cost to business of making one application for redundancy payment was €76 before the simplification exercise and €28 afterwards. This amounts to an annual administrative saving of €1.2 million for business. There were also administrative efficiencies within the Redundancy Payments Unit. Between 2000 and 2007, the number of redundancy payments processed had more than doubled, but successful completion of the simplification plan allowed the Unit to reduce staffing needs back to the level required in 2000. This represented a saving of the equivalent of seven staff.

2.1.2

Audit Exemption Prior to the Companies (Amendment) (No.2) Act 1999, all limited companies were required by law to have an auditor and to have their accounts statutorily audited each year. That Act introduced the concept of an audit exemption for companies. The statutory audit requirement was perceived as imposing an undue burden on small firms and, therefore, in order to reduce the administrative burdens on businesses, the audit exemption was introduced. In 2006, the criteria1 for exemption were revised, substantially increasing the number of companies eligible for exemption. A survey of companies was conducted to establish three key quantities: the internal administrative cost of supporting the statutory audit2; the external cost of the statutory audit (viz., the auditor’s fee); and the number of companies availing of the exemption. The estimates provided in the survey suggest that the average administrative cost to companies of supporting a statutory audit is about €450. (The companies surveyed claimed not to have noticed any change in auditors’ fees when they availed of the statutory audit exemption.) As regards the numbers availing of the exemption, CRO data indicate that some 14,500 companies stated that they availed of the audit exemption in 2007. This includes those still below the pre-2006 threshold levels. It can be determined, from Revenue Commissioners’ figures, that approximately 12,700 more companies can now avail of exemption from audit as a result of the threshold change.3 In a second survey, this time of accountancy bodies, estimates provided by those participating in this survey are more revealing. It was estimated that to add the statutory audit to a list of services provided to a company would cost between €1,500 and €2,000 and that this activity would require the support of a company’s middle-ranking book-keeper / accountant for one day. This accords well with the results above, where the average cost of supporting the auditor by the primary person within the company, including overheads, brings the total cost up to €450. The auditors estimate that between 60-70% of their clients within the extended threshold have availed of the exemption. On this basis it is estimated that 8,300 companies are availing of the new exemption. Given that the internal administrative

1 Firms with less than 50 employees and with a turnover of less than €7.3m and a balance sheet of €3.65 million. Previously the thresholds were €1.5m and €1.9million. 2 That part of overall auditing activity to which the exemption refers, can be referred to as the “statutory audit”, so that it may be distinguished from other audit related activities. 3 Based on the turnover threshold only, viz., €1.5m to €7.3m, and based on the number of entities paying Corporation Tax (in 2006; latest figures available) within these boundaries.

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cost is €450 for one company, the likely average saving across all companies availing of the exemption is €3.735 million. The average auditor’s fee for the statutory audit is €1,750 (based on the auditors’ estimates above). If 8,300 companies were also saving this much, it would mean a further administrative burden saving of €14.525 million each year. There appears, therefore, to be some potential for a total saving in the region of €18.3 million annually for companies where the full audit fee savings are taken into account.

2.1.3 Tax Clearance Certificates A firm that wants to do business with the public sector should have its tax affairs in order. To ensure this, contracts (to an annual total) of more than €10,000 require production of a Tax Clearance Certificate (TCC) prior to payment. This can be done in two ways: traditionally public bodies were required to see an original of the firm’s TCC; or businesses can opt to allow access to their TCC details on the Revenue website by means of providing a reference number to the public body requesting the TCC. A survey of public sector bodies found that approximately 100,000 TCCs are submitted by businesses each year. A small survey of businesses was also carried out in order to understand the administrative activity associated with submitting a TCC. This found that the standard practice appears to be that faxed or photocopied TCCs are frequently accepted, and the original TCC is required in only about 25% of cases. The cost of sending an original TCC is approximately €14 and the cost of sending a fax or email etc., is around €1.40, giving a weighted average of €4.40. At around 100,000 times per year, this amounts to a total administrative cost to business of €440,000. While the option for businesses to allow on-line access to their TCC has been available for the past four years, only about 30% have availed of this facility. The Revenue Commissioners have simplified the online application process, upgraded the online verification link on www.revenue.ie and written to all Government Departments to promote the take-up of this efficient, user-friendly facility. If all businesses were to opt for the on-line system, this would amount to a saving of €300,000 in administrative burdens. While this is not a large amount in national terms, it is important to remember that simplification is about removing “irritation burdens” as well as tackling the most costly issues.

2.1.4 Companies Annual Return The Companies Acts require registered companies to make an Annual Return to the Companies Registration Office (CRO). This involves filling in a form (Form B1) and attaching a number of accounting documents, depending on company size. During September 2006, PriceWaterhouse Coopers, on behalf of the Business Regulation Forum, measured the administrative cost associated with this form at more than €35 million per annum. In the intervening period, the CRO have made a number of improvements aimed at reducing costs through simplification of procedures. The High-level Group conducted a second measurement, aimed at identifying the cost improvements that have resulted for companies.

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Chief among the simplifications introduced is that the B1 form may now be submitted electronically, by using either the CRO’s online environment (CORE), or via a software package4. Given that the total administrative cost previously calculated for filling out the B1 form was €35.85 million, the average administrative cost for the 144,907 registered companies associated with the B1 form was, therefore, €247. Adjusting this cost to reflect the time saving through e-filing, and the percentage of companies doing so (17%), the High-level Group estimates that the overall cost is reduced from €35.85 million to €25.4 million, a saving of over €10 million. As 2007 was the first full year when CORE was available for annual returns, it is likely that the time (and cost) associated with this route will fall as companies become familiar with it. Secretarial software packages have been in use for a number of years. Moving to a fully electronic environment would yield further savings, and a saving in total administrative costs of around €28 million is possible. (This issue is looked at further in Section 3.1, below)

2.1.5

VAT Registration Thresholds The Minister for Finance announced in Budget 2007 that, from 1 March 2007, the small business VAT registration turnover thresholds were being increased from €27,500 for services and €55,000 for goods, to €35,000 and €70,000 respectively. In Budget 2008 they were further increased to €37,500 and €75,000 respectively. These measures have taken over 10,000 businesses out of the VAT system. Data on time spent on VAT activities were extracted from a recent Revenue Commissioners’ publication5 and further data were obtained by means of telephone interviews with businesses. The population of 10,000 businesses is estimated to benefit from the increase in VAT registration thresholds to the extent of €5.4 million annually. Additionally, in order to reduce compliance costs, less frequent filing of VAT3 returns was introduced for small traders in 2007. Businesses whose annual VAT liability is €3,000 or less are now obliged to file their VAT3 returns only twice a year. Those whose annual VAT liability is between €3,001 and €14,000 are obliged to file only three times a year. These changes, which assisted in reducing the administrative burden for approximately 70,000 businesses, came into effect from 1st July 2007 for twice-yearly filing and from 1st September 2007 for those filing three times a year.

4 Any one of a number of secretarial software packages may be used. 5 “Key Administrative Burdens Faced by Revenue’s Small and Medium Sized Business Customers", Revenue Commissioners, March 2008.

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2.1.6

2.1.7

Waste Collection Permits An operator must have a permit to collect waste. He can get this from one of ten nominated local authorities. Until March 2008, a separate permit was necessary to operate in each of the ten regions. Therefore, a national operator had to apply 10 times for ten different permits. However, on 31 March 2008 revised waste collection regulations came into effect. The key changes brought about by this include providing the option of applying for a permit for specified regions or multi-regions by means of a single application to a single nominated authority and also extending the validity for a collection permit from 2 to 5 years. Under the old system, there were a number of other administrative requirements: Waste Collection Permits had to be reviewed every two years; Material Changes to the permit had to be applied for (if the operator wanted to add a county or move into hazardous waste, for example); Minor Amendments (usually adding a vehicle) had to be applied for; and Annual Reports had to be submitted to each nominated Local Authority in which an operator collects. More than 800 new permits countrywide were applied for in 2007. These took around 40 hours to complete in each case and required placing an advertisement in national newspapers. Multiplying this by an appropriate hourly wage and adding overheads at the standard rate of 25% brings the total cost relating specifically to new applications for a Waste Collection Permit to almost €2.4 million. In general, the responses regarding administrative procedures showed little variation from company to company. The measurement revealed that the total administrative cost to the industry of all the related procedures is almost €8 million per annum.6 Since the new regulations came into effect, it is possible for waste collection companies to apply to only one of the ten nominated authorities and this will cover their activities countrywide. This, and other changes, have the potential to reduce the administrative burden significantly on many operators in the industry. The High-level Group believes this is an excellent example of administrative burden reduction. When the measures are in place for about a year, the High- level Group will measure burdens again in order to quantify the benefits that have arisen as a result of the change.

Road Haulage Permits Under existing procedures, road hauliers have to obtain permits from local authorities for the movement of Abnormal Loads, i.e. wide and long loads. There are 34 individual local authorities in Ireland issuing separate permits for Abnormal Loads moving through their areas. The Road Safety Authority (RSA), in its Road Safety Strategy, 2007-2012, plans to introduce a centralised permit system for the movement of wide and long loads on the National Road Network. The total number of permits for Abnormal Loads issued in 2007 was 10,997. A survey of companies revealed that the average administrative burden per permit was €22.45. The total burden on the Road Haulage Sector, seeking permits for Abnormal Loads, can on this basis, be estimated at approximately €247,000 in 2007. If the RSA’s centralised permit system is introduced (and has the ‘on-line’ capability of the centralised system which is currently in operation in Northern Ireland) it is

6 This does not include the permit application fee of €1,200.

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estimated that the burden on road hauliers seeking permits for Abnormal Loads could be reduced by 75%, equivalent to an annual saving of approximately €185,000. The High-level Group believes that the RSA centralised system would represent a significant easing of the burden on the haulage sector and urges that it be introduced as quickly as possible.

2.1.8

Employment Permits A non-EEA7 national is normally required to have an employment permit to work in Ireland8. An employer who wants to obtain a permit must make an application to the Department of Enterprise, Trade and Employment. Various categories of permit require different sets of documentation to be attached. This may include copies of passport pages, immigration stamps, visas, etc. As well as gathering these documents the employer is also required to get an original signature from the employee which means sending the form to the prospective employee in his country of residence. Since the introduction of the Employment Permits Act 2006, the employee may now apply directly for the permit. (Around 4% of permits are applied for by employees.) The Employment Permits Act 2006 now allows for two-yearly renewal of permits, instead of the annual renewal required previously. The High-level Group measured the administrative cost to businesses associated with the application procedure outlined above. The average time taken to fill out the necessary forms was found to be about half an hour, which translates into an administrative cost for the business of around €28 for each application. More than 23,500 employment permits were applied for in 2007, so the overall administrative cost of this activity comes to approximately €650,000. However, the exercise focused specifically on the “red tape”, or form-filling, activities involved. For this reason, two major aspects of the procedure, namely the fee charged and the waiting time involved are not reflected in the total burden on firms. Some respondents said that they used an agent to apply for permits. This cost between €400 and €1,000, is estimated to involve an additional €1.5 million in administrative costs to businesses.9 While the administrative cost of applying for employment permits appears to be relatively low (as long as an agent is not employed to make the application), it would appear that the waiting time involved has been an issue for some applicants. In the past year, however, between May 2007 and May 2008, processing times have fallen

7 The EEA comprises of the Member States of the European Union together with Iceland, Norway and Liechtenstein. 8 From the 1st January 2004, Ireland was one of the only three Member States to open up labour access to new Member States, thus giving Irish business immediate access to an additional 75 million potential workers. This has considerably reduced the burden on business and Department data show that the number of permits issued has fallen from almost 48,000 pre-accession in 2003 to less than 23,000 last year, since prior to 2004 a majority of permits were issued for workers from Eastern or Central Europe. 9 Fees charged to Government are not included in the measurement of administrative burdens, as to do so could suggest that reducing the fee would reduce the burden on business (as opposed to the cost). Reducing fees merely transfers costs from business to the State, rather than focusing on efficiency improvements to business. Despite this, it may be useful to note that businesses were charged an average of €657 per application for an employment permit in 2007.

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more than 60% across the various permit types. While each permit takes a different average time to process, it is noteworthy that an un-weighted average of the processing times for all application types has fallen from around 30 days to 9 days. An online application system is now planned. Design work on the system is nearing completion, and it is planned to tender for the build of the system during summer 2008. Applications and renewals under this system will be capable of completion online by employers, who will also be able to track the status of applications. Further, it is intended that the new system will have data-sharing facilities with other Government Departments and Agencies, eliminating the requirement to submit certain details in paper form. The High-level Group proposes to measure the administrative cost in this area again when the various planned improvements have taken effect. It is likely that the most important aspect of this for applicants will be waiting time, which already appears to be on the decline.

2.2 Summary of Administrative Costs and Savings Eight measurements of administrative costs are set out above. Of these, five relate to issues where simplifications have already been implemented. In these cases, administrative savings can be calculated. In the other three cases, simplifications have been agreed or enacted, but may take some time to become actualised. In these cases, the High-level Group will conduct a further measurement within about twelve months to take account of the savings that have resulted. Administrative Savings Already Achieved 1 Redundancy Payments €1.2 million 2 Audit Exemption Threshold €3.735 million10 3 Tax Clearance Certs €0.3 million 4 CRO Annual Return €10 million 5 VAT Registration €5.4 million Total €20.635 million Administrative Costs Measured – Further Measurement of Cost Savings as a Result of Changes in Train to be Undertaken. 6 Waste Collection Permits €8 million 7 Road Haulage Permits €0.247 million 8 Employment Permits €0.650 million Total €8.897 million

10 When the accountant’s fee for the statutory audit is included the total saving to business rises to €18.3m, bringing the Total to €35.16

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3.1

3.1.1

3.1.2

Outcomes To Date: Longer-Term Actions

Annual Returns to Revenue and CRO

Background In the workshops with the business community (see Section 1.4 of this Report), a major item of concern was the perceived overlap in returns of similar data to different offices, notably company, trade and financial data to the Revenue Commissioners, the Companies Registration Office (CRO) and the Central Statistics Office (CSO). Business people suggested that the burden arose from the need to recast existing company data into different formats to meet the needs of the different offices. Form CT1 is the annual return due to the Revenue from active companies which are trading and/or deriving income from other sources and may be liable for corporation tax. Form B1 is the annual company return to the CRO for registered companies and is available for inspection in the Companies Register. An important distinction between the two returns is that, while the Revenue CT1 return is a confidential document relating to the company’s tax position and used for the assessment and collection of corporation tax, the CRO B1 form is intended to allow public inspection of basic details of registered companies. A study carried out for the Business Regulation Forum estimated that the annual cost to business of making the B1 return is over €35 million. There are no costings available for making the CT1 return. Separately in this Report, Section 3.2 deals with work ongoing to reduce overlaps in returns to the Revenue and CSO.

Issues Arising The High-level Group consulted both Revenue and CRO and examined issues under the following headings:- Content of the Returns The Revenue form contains three components; a) basic company identification details; b) trading results and extracts from the company’s accounts; and c) other tax-relevant financial data. Revenue’s large corporate customers must file full paper accounts.8

8 Companies with turnover in excess of €20m continue to file full paper accounts. Companies with turnover of less than €20m file the trading results and accounts details referred to at b) above but do not file full paper accounts

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The CRO form contains a summary of basic company details (e.g. registered address, directors, shareholders). It is accompanied by a signed copy of the company’s full or abridged accounts. Making the Returns: Who, When, Where and How? Around 145,000 companies have to submit a CT1 return to Revenue. The entire 165,000 (approximately.) registered companies are required to return a B1 form to the CRO (and to submit other forms as certain changes occur, e.g. change of directors or registered address.) For Revenue, CT1 returns are required by the 21st day of the ninth month after the end of the accounting period. The CRO annual return gives the particulars of the company at its ‘Annual Return Date’ (ARD), which can be up to nine months after the end of the accounting period. (A company has 28 days from the ARD to file the return.) There are currently certain restrictions on companies as regards changing their ARD but the Companies Acts could be changed to allow companies to align the filing dates for the two returns more readily. Both CRO and Revenue have invested significantly in electronic filing solutions in recent years to make it easier for companies to make official returns. For Revenue, the return can be made online via ROS (the Revenue On-line Service). Revenue is currently at 66%9 (up from 42% in 2005) e-filing of CT1 and is consulting with a view to commencing a phased introduction of mandatory e-filing in 2009, starting with large cases. CRO e-filing (of the B1) is currently at 37%, up from 5% in 2005. Many firms use secretarial software packages that incorporate tailor-made filing modules that enable the direct electronic filing of returns to the CRO, including the B1 annual return. CRO checks the B1 for compatibility with existing returns. For forms filed electronically, many of those checks can be carried out automatically at the time the form is being completed by the client. Because CRO requires the accounts to be signed by a director and secretary of the company, accounts have to be submitted in hard copy because CRO does not currently have a non-repudiable means of electronic signature. The CRO scans accounts onto the imaging system. The public can view the scanned images on line. The High-level Group notes that in the Joint Motion on eGovernment Services, passed by the Dáil on 30 April 2008, the Government was urged to ensure that the forthcoming plan for the Knowledge Society should address the need for secure identification and payment systems. The Group considers that the success of eGovernment initiatives will be strongly supported by such systems and by the development of an electronic signature that would be recognised across Government. Compliance and Enforcement Issues Each office deals with distinct offences and penalties relating to its governing legislation and, therefore, has different enforcement processes and approaches. Through the offices’ customer service mechanisms, as well as through professional service bodies e.g. accountants and solicitors, businesses are well acquainted with how each enforces breaches of the law. 9 Revenue Annual Report 2007

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Management Issues The requirements of each office are constantly changing in terms of the legal requirements, form contents or method of return. These changes include: periodic changes to the return; maintenance and development of the technological infrastructure; enforcement issues and links to other CRO or Revenue returns. This process has to be managed efficiently from the point of view of both the customer and the agency.

3.1.3 Towards a Simplified and Simultaneous Process Having reviewed the processes in terms of the foregoing issues, the High-level Group believes that: Any necessary legislative changes to enable companies to file their annual

return and CT1 at the same time should be effected; Both offices should continue to encourage and develop electronic filing with

a view to phasing in mandatory e-filing (subject to Ministerial Order) of all returns. A commencement date should be fixed for the largest companies and extended in stages to smaller companies. The total phasing-in period should be timebound e.g. five years or less;

In respect of companies that file electronically, the CRO should move to a

continuously updated ‘standing e-profile’ with the necessary changes being made as and when they arise. The accuracy of the e-profile should be confirmed by the company once a year. This will mean that, in practice, the current annual return process will disappear;

Both Revenue and CRO are keen to move to receiving accounts in

electronic XBRL format (see Section 3.3 of the Report) as soon as the relevant accountancy bodies design the format to work in the Irish accounting regime. Receiving accounts in XBRL will allow the offices to manipulate the data to their own needs and allow access to/from each other. CRO and Revenue should jointly engage with the accountancy profession with a view to encouraging the latter to conclude an Irish taxonomy for XBRL accounts as quickly as possible and its introduction in the same timeframe as mandatory e-filing;

A CRO / Revenue working group should meet on a regular basis to ensure

that optimal use is made of submitted data and that duplication and, therefore, the reporting requirements on companies are minimised; this working group would analyse and resolve implementation and administrative issues arising in the best interests of business, Revenue and the CRO and will be cognisant of the legislative requirements of the two offices.

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3.1.4

3.2

1 2 3

Conclusions The High-level Group suggests implementation of the simplified and simultaneous process as described above. The Group believes that with the development of technology, such an approach would be taken in the future anyway (although probably on an individual office basis) but advises that its introduction should be accelerated. Each office would maintain responsibility for enforcement issues, thus avoiding any new confusion for business. An important aspect of this approach is that the two agencies are willing to work closely together and to engage with accountancy bodies on the finalisation of an XBRL taxonomy to produce a cross-agency result, which can be replicated by other Government agencies, for example, the CSO. Revenue and CRO, through their existing customer service mechanisms, should immediately encourage companies/ practitioners to file their CT1 and B1 on a common date and any necessary legislative change should be made as part of the proposed Companies Consolidation and Reform Bill. Finally, the High-level Group suggests that companies that maintain the e-profile and file accounts through XBRL should not be required to file duplicate information with any other Government Department, Agency or Office. In summary, the Group believes that by introducing a simultaneous return date to CRO and Revenue, by phasing in mandatory e-filing, including accounting data in XBRL-format, and by ensuring that agencies can cross-access data, the burden on business will be considerably reduced.

Returns to Revenue and CSO In September 2007, the CSO, in cooperation with the Revenue Commissioners, initiated an assessment of data submitted to and held by Revenue in relation to tax, duty and trade returns from business. The purpose of this assessment is to examine the potential for compilation of official statistics using existing Revenue data. The project is a thorough review of the data held by Revenue and is a time consuming and complex task. CSO and Revenue teams have met at least once a fortnight since the beginning of the project. CSO hope to publish a full report by the end of July 2008. Broadly speaking, there are 3 phases to the project:

Review 14 relevant taxation and levy types; Review Revenue data needs (from the CSO); Discuss general registration (and associated) issues.

In Phase 1, for each of the 14 relevant taxation and levy types11, the data were assessed in terms of quality, potential for compiling official statistics and potential for reducing administrative burden. Without question, given the volumes of data held by

11 These are: Corporation Tax, VAT, Income Tax, Relevant Contracts Tax, Customs and Excise, Vehicle Registration Tax, Stamp Duty, Capital Acquisitions Tax, Capital Gains Tax, DIRT, Dividend With-holding Tax, E-levy, Professional Services With-holding Tax and Residential Property Tax.

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the Revenue, at this stage of the project there would appear to be significant potential for CSO to utilise the data held by the Revenue. However, due to conceptual differences between data collected for taxation purposes and those collected for statistical purposes, the CSO’s utilisation of the taxation data to its full potential for statistical purposes will be a complex exercise and will require, in the view of the CSO, ongoing development in statistical infrastructure. While it appears that there is scope for reducing administrative burden through the CSO’s use of the taxation data, achieving this reduction and measuring the savings to business could take some years to fully implement. The High-level Group looks forward to the development and implementation of this project and to receiving further updates from the offices concerned over the coming year.

3.3 Reporting Financial Data - XBRL XBRL – eXtensible Business Reporting Language – is a computer platform for the transmission and manipulation of financial data. XBRL is already in use among major multinational corporations for the transmission of financial statements, etc. and is coming into increasing use by Government agencies. For example, more than 400 banks are filing monthly financial statements in XBRL to the Bank of Spain, which is responsible for overseeing the country's banking system. The introduction of XBRL for this kind of reporting has enabled automatic data validation, achieved better quality of data and reduced manual effort. The Bank of Spain is now expanding its use of XBRL. To make the technology viable, a taxonomy of accounting standards/terms etc. has to be agreed between the accountancy bodies so that a uniform language can be applied. In Ireland, the main accountancy firms have established Business Reporting Ireland Ltd. (BRIL) for this purpose. The company is in the process of finalising the Irish taxonomy, in consultation with a number of Government Offices who could benefit from the electronic return of financial data, notably, the CRO, CSO and Revenue. XBRL has the potential to be a significant development in terms of making financial data returns to Government. In theory, a single XBRL-format return to one agency could be capable of manipulation by other agencies to meet their needs or indeed to improve the quality of the information being returned. The High-level Group considers that the accountancy bodies should move quickly to conclude the Irish XBRL taxonomy. On that basis the Group has already suggested, at Section 3.1 above, that the CRO and Revenue should move to require financial returns in this format. It is the Group’s view that if this is introduced, then other Agencies will similarly benefit and the burden of returning financial data by business can be greatly reduced.

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3.4 ‘Single Window’ for Importing and Exporting The ‘Single Window’ is a system through which a business can fulfil all or many of the requirements related to import and export regulations, for example, customs clearance, food safety approval, export licence for dual use goods, etc. Forfás has been working with Trade Facilitation Ireland12 to scope out the issues and bring some awareness of the perceived benefits of an integrated trade facilitation system for Ireland. The number of administrative interactions that a trading (exporting or importing) business must carry out is not fully known. While each individual Government agency interacts with trading businesses for its own reasons, it is not clear what the totality of the interactions is. The following is a graphical illustration of the point.

For this reason, Forfás is undertaking a study to understand the web of interactions and to quantify the administrative costs involved. It will also look at the format of the communications to determine which, if any, of the interactions could be made electronic and thus more easily consolidated. The study will first map the interactions required by a typical business in each of four economic sectors: food, pharmaceuticals, ICT and chemicals/machinery. The administrative costs associated with these interactions will then be measured. This will

12 Trade Facilitation Ireland is a private sector body which was set up to promote the simplification of international trade procedures. Its vision is to identify opportunities to add value to Irish exports; to establish and retain the competitive superiority of goods and services produced in Ireland, and to reduce the cost of burden of carrying out export activities from Ireland.

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provide both a clearer understanding of the issues involved as well as evidence about the real level of costs for business. This will inform what action could be taken to reduce, remove or consolidate trade-related interactions, in the context of ‘cost versus benefit’. The High-level Group intends to further examine the scope for a ‘single window’ approach to trading regulations in light of the Forfás findings.

3.5

3.6

Unique Business Identifier The purpose of a unique business identifier (UBI) and an associated register system is to provide a uniform means of identifying and servicing business entities which are required to be registered with, licensed by, regulated by or provided with a business development service by a statutory Agency. The issue of UBI has become a pressing matter for policy-makers in Ireland following Government commitments to reduce the regulatory burden on businesses. In December 2006, the Government agreed to the establishment of a cross-Departmental group, chaired by the Department of Enterprise, Trade and Employment, to examine the feasibility of introducing a unique business identifier and associated central business register and to report to the Minister for Enterprise, Trade and Employment. The cross-Departmental group which includes key operators such as the Revenue Commissioners, CSO, CRO and Forfás has agreed to initiate a scoping study to examine options, costs and benefits. The High-level Group regards the UBI project as important strategically in reducing the administrative burden on business. A fully functioning system could pave the way for agencies to access data from each other instead of seeking overlapping returns from business. The High-level Group urges that the cross-Departmental Group conclude its feasibility study as soon as possible and intends to monitor progress on the issue.

Data Strategy Following implementation of recommendations of the National Statistics Board Strategy for Statistics 2003-2008 Progress Report, the Government decided to request each Department to draw-up a data strategy. The development of a data/statistics strategy for each Department was viewed as key to identifying national priority areas for statistical development. The National Statistics Board published guidelines to assist Departments with the process of preparing their strategies, which broadly involves four tasks:

• To determine how and to what extent the Department's data needs can be met from within;

• To establish what information, which is not internally available, is required • To identify the data needs in respect of complex and cross-cutting issues with

which the Department is concerned; and • To identify how the skills of its staff in using data as a tool for policy evaluation

and development can be enhanced.

Work is underway in Departments to draw up such strategies.

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The High-level Group emphasises that statistical enquiry to the business sector is perceived as one of the largest areas of burden. A significant proportion of data queries to business emanate from EU requirements agreed by the 27 Member States. (In the case of CSO, it is estimated that 85% of survey requirements are EU-agreed). In that context, the Group suggests that Departments, when drawing up their data strategies, should observe the following fundamental principles:

(i) ensure that the data is not already being sought by another agency;

(ii) establish as part of the enquiry the cost to business of making the

return and consider whether it can be reduced or eliminated;

(iii) seek to ensure that internationally agreed demands take account of smaller countries small survey base; and

(iv) give feedback to respondents on the use of the data.

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4

4.1

4.2

Future Work Programme

High-Level Group – Rolling Agenda In its ongoing work programme, the High-level Group will, in the first instance, continue to deal with a range of issues brought to its attention by business. Submissions received by the Business Regulation Forum in 2006, as well as the business workshops held during 2007, have both provided a wide selection of suggestions and issues for the Group’s consideration. The full listing of such suggestions, and their current status, is contained in Appendix B. As indicated in the Appendix, the Group will continue to pursue these issues and, where necessary, to fulfil its remit as a ‘clearing house’ for any obstacles that may exist. Secondly, the High-level Group wishes to strongly encourage businesspersons, individual businesses, sectoral bodies, or professional practitioners and organisations to make suggestions for reducing administrative burdens on business. As before, the Group stresses that its remit refers solely to reduction of the administrative costs and burdens involved and insofar as the policy objectives of the regulations under consideration are not undermined. Again, it should be mentioned that this means that safeguards for workers or the environment, for example, will not be weakened as a result. Thirdly, in addition to the concrete suggestions from the business sector, and conscious of the need to focus on the five priority areas of regulation,13 the Group intends to conduct an analysis of the regulatory requirements in these areas. Initially the focus will be on the areas of Company Law and Health and Safety Regulations. The major obligations in terms of cost and burden to business in these areas will be identified before considering options for reducing the burden. In pursuing this approach, a focus will be maintained on the specific issues raised by business.

Future Regulation As part of the Government’s wider agenda to improve the regulatory environment and to ease the burden on businesses affected by regulations, new legislative proposals have to be subjected to a regulatory impact analysis (RIA). RIAs are conducted according to guidelines issued by the Department of the Taoiseach. The operation of the RIA process is currently under review. The High-level Group is aware that the Government recently decided that, in relation to future regulations and the conduct of an RIA on such proposals, all Departments should: assess the proportionality of the burden to the risk foreseen; measure the administrative cost on business; examine the impact on small business; and consider what education and advice requirements are necessary to improve

compliance.

13Taxation, Statistics, Environment, Health & Safety, Employment & Company Law.

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The High-level Group welcomes this decision and looks forward to its reflection in revised RIA guidelines following the current review. The Group believes that, while its work on the existing stock of regulations will be of concrete benefit in itself, it is, at the same time, essential that new regulations do not impose additional unnecessary burdens. The Group also believes that Departments should use the methodology employed in the various reduction measurement cases in Section 2 of this Report in measuring the administrative cost of new regulations.

4.3 e-Government Solutions Specifically in terms of simplifying the interaction with business by means of improved electronic communications, the Group notes that two recent reports commented on this aspect. In January this year, the Comptroller and Auditor General published a Value for Money report on e-Government in Ireland. The report evaluated the execution of the 1999 and 2002 action plans for the information society in Ireland. The stated objective of the 2002 plan, New Connections, was to have all services capable of on-line delivery available by 2005. This ambitious target was not met, however, and the report makes a number of recommendations as to how such projects should be delivered more effectively in the future. The report states that: “Senior management commitment and the resolution of organisational, process, human and technological issues appeared to be more important in encouraging eGovernment than additional funding.” The Report also states that: “Measurable targets should be set for each of the strategic goals of eGovernment, and responsibility for the achievement of the goals should be formally assigned,” and that “Cross-cutting projects should have unitary management. Directors for such projects should be appointed from the bodies involved in the projects, and have clear responsibility and accountability for delivery.” Also in 2008, the OECD conducted a review, entitled Towards an Integrated Public Service. The review emphasises the need for the Public Service to be viewed as a system, with greater levels of accountability and coherence. The review also recommends a number of targeted and interdependent actions. These include improved dialogue between Departments, Offices and Agencies and an increased use of networks. Performance measures should focus more on outcomes than on inputs and processes, and increased flexibility is required to facilitate this. More emphasis on the role of ICT and eGovernment in information sharing is also needed, as is greater mobility of staff, aimed at developing and broadening the skills of staff. Finally, the review sees the need for a stronger leadership role, “both through the creation of a Senior Public Service, and the development of a more strategic role for the Centre.” The High-level Group endorses the views on greater use of ICT in these reports and urges the Government to implement them as quickly as possible in order to improve customer service and reduce the burden on business. The approach outlined in Section 3.1 of this report – relating to returns to the Revenue and CRO – is a practical example of the benefits that can be achieved.

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5

5.1

5.2

Other Developments

European Commission Action Programme to Reduce Administrative Burdens

The European Commission has begun a process to measure and reduce the administrative burden of EU regulation on business by 25% by 2012. The Action Programme for Reducing Administrative Burdens in the European Union, presented by the European Commission in January 2007, demonstrates in concrete terms the way in which the Commission intends to work with Member States to meet this target. Administrative burdens reduced since 1 January 2004 may be taken into account. The programme focuses on Information Obligations (IOs) in thirteen selected priority areas including Company Law, Employment Relations, Taxation/VAT, Statistics, Agriculture and Transport. Its aims are to measure administrative burdens of certain Directives, Regulations, etc. in these key sectors and to identify Information Obligations that should be reduced. The exercise has commenced with company law. Consultants have ‘mapped’ all the ‘Information Obligations’ (that is, the specific requirements on companies to provide or retain e.g. records, returns, reports, applications) under a number of company law Directives and are currently measuring the cost to business involved. The Commission will then select the most costly IOs and make proposals to cut the cost to business. The proposals in relation to company law are expected in Summer 2008.

National Target for Administrative Burden Reduction

Related to the EU Commission Action Programme above, the European Council in March 2007 invited Member States to set a target for reducing the administrative burden of national regulations. In response, in March 2008, the Government decided to reduce the administrative burden of national regulation on business by 25% by 2012. The Department of Enterprise, Trade and Employment is responsible for developing the methodology to be used across Government Departments and Agencies and for reporting to Government on progress. Initially, all Government Departments will be required to list the Information Obligations which their regulations impose on business. From that listing, Departments will assess which requirements are the most burdensome and will then measure the actual cost to business of these requirements. At that point the most appropriate approach to achieving the 25% target will be re-examined. The Group believes that its work and the cross-Government exercise are mutually supportive. The ongoing work of the High-level Group will be of direct benefit to Departments in achieving the Government target. At the same time, the cross-Government exercise may yield some practical areas for the High-level Group to

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examine. In that context, the Group will be kept up to date with developments in the cross-Government process. The Group advocates that the methodology used in the case studies in Section 2 of this Report should be used by Departments to measure administrative burdens.

5.3

5.3.1

5.3.2

Consolidation of Legislation

Introduction Consolidation of legislation is undertaken primarily with the intention of making it easier for those affected to comply with the requirements. While it would be impossible to measure the time and cost savings, or improved compliance levels, as a direct result of consolidation, there is no doubt but that a great deal of the irritation factor experienced by practitioners of the law can be removed when the provisions are laid out in a more logical and sequential fashion. Within the five priority areas being examined by the High-level Group, the areas of Health and Safety legislation and Employment & Company Law - have been, or are in the process of being, consolidated and simplified within the Department of Enterprise, Trade and Employment. As set out in Section 4.1, the High-level Group proposes to conduct an exercise to list, prioritise and measure the obligations under these priority areas, beginning with company law and health and safety law to determine where the biggest burdens arise and to examine ways to reduce the burden, while preserving the integrity of the regulation concerned.

Company Law There are currently thirteen Companies Acts, as well as related Statutory Instruments, dating back to 1963. The Company Law Review Group (CLRG) has recently prepared the General Scheme of the Companies Consolidation and Reform Bill which consolidates the existing thirteen acts and Statutory Instruments into one. It also introduces a number of reforms which will make the incorporation and operation of companies easier. The General Scheme runs to over 1250 sections. The Government has accepted the CLRG proposals and the Bill is currently being drafted. It is expected to be enacted in 2010. From a ‘better regulation’ point of view the new Bill will be framed around the provisions relating to the ‘private company limited by shares’ which represents 90% of registered companies in Ireland the current acts were written mainly with the public companies in mind. The legislation will deal sequentially with issues relating to incorporation, corporate governance, duties of directors and secretaries, financial statements and auditors, receivers, reorganisations and examinerships, windings-up and compliance and enforcement. In addition to the consolidation of the existing legislation, the Bill will contain the following reforms:

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The company will have a one-document constitution, replacing the current two documents i.e. the memorandum and articles of association. This will simplify the process of incorporation and operation of the company.

The company will not be required to have an ‘objects’ clause in its constitution i.e. a statement enabling it to undertake only specified types of activities.

The company may have just one director (current minimum is two) and a company secretary. The company secretary and the sole director cannot be the same person.

It may have just one member (usually meaning shareholder). Its members can waive the requirement to hold an Annual General Meeting

(but if 10% of the membership subsequently requests an Annual General Meeting or an Extraordinary General Meeting, it must be held).

For specific activities (e.g. loans to directors), currently restricted by law, directors may invoke a ‘validation procedure’, permitting the transaction only if the company is solvent.

Where a director holds less than 1% of share capital in a related company, he will not have to disclose that shareholding.

The Bill will also reduce the involvement of the Courts in the company winding-up process so as to minimise the burden and cost on creditors and shareholders.

The company will be eligible for audit exemption up to the new EU thresholds.

5.3.3 Health and Safety Law Considerable work has been done to simplify and consolidate relevant legislation and this process is continuing. A major review of the primary legislation requirements, carried out by a group representing employers, trade unions and Government, resulted in the drafting and subsequent passing by the Oireachtas of the Safety, Health and Welfare at Work Act 2005. The primary legislation is supplemented by sector-specific secondary legislation and codes of practice covering construction, agriculture, quarries, mines and other sectors as necessary. Separate regulations relating to safety in the construction industry were made in September 2006 (the Safety, Health and Welfare at Work (Construction) Regulations 2006) and similar occupational safety regulations for the quarrying sector were signed in February and came into force on 1 May 2008. Following the enactment of the Safety, Health and Welfare at Work Act 2005, the revised, restructured and consolidated Safety, Health and Welfare at Work (General Application) Regulations 2007 have been in operation since 1 November 2007. Detailed Guides to the various provisions of these General Application Regulations have also been produced by the Health and Safety Authority (HSA) and shorter, simplified guidance material is currently being developed. In 2006, the Authority issued a “Code of Practice for Preventing Injury and Occupational Ill Health in Agriculture”, which provides practical guidance to people at work in the agriculture sector. The Code, in particular, provides practical guidance on the provisions of the 2005 Act relating to hazard identification and risk assessment and the safety statement. This Code of Practice came into effect on 1 November 2006. A Code of Practice for Employers in the Construction Industry (with three or less employees) was launched in 2008 and a similar code of practice for the Fishing

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Sector is being developed. These codes of practice are based upon the Safe System of Work Plan (SSWP), this is an international award winning system designed by the HSA. In addition to the above, the Authority has produced a wide range of other guidance material including the following: • ´Simple Safety’ series – a series of practical tools designed to help small companies improve their workplace health and safety and reduce accidents. The series was designed with the needs of a small business owner/manager in mind, particularly those in the retail or food and drink business with up to ten staff. • Information Sheets – these address specific issues identified to the Authority through consultation including ‘Slips, Trips and Falls in the Workplace’, ‘Using Ladders Safely’ and ‘Safe Use of Work Platforms/Trestles’. The Authority is currently revising the ‘Safe Company’ publication, which provides practical guidance on how to create a safe working environment.

5.3.4 Employment Law The Department of Enterprise, Trade and Employment intends to prepare an Employment Consolidation Bill in 2009, following enactment later this year of the Employment Law Compliance Bill 2008. The Consolidation Bill, in keeping with the commitments in “TOWARDS 2016”, will update and codify employment legislation now comprising more than 20 separate codes14, some dating as far back as 1946. Preparatory work on the Bill has already commenced as a by-product of the 2008 Bill referred to above. Updated texts of 21 suites of Acts and some Statutory Instruments have been published on the Department’s website (www.entemp.ie) and the text of relevant Statutory Instruments will be published likewise as soon as possible. Finalisation of the Bill will have to take account of, inter alia, Court rulings (national and European Court of Justice) and developments in EU employment legislation (the source of many of the existing separate Irish codes).

5.3.5

Customs Legislation Recognising that the compliance burden on business can be aggravated by complex legislation and regulation, Revenue, in recent years, has engaged in a comprehensive programme to systematically consolidate and streamline older tax and customs legislation. Examples include the Taxes Consolidation Act 1997, Stamp Duties Consolidation Act 1999, Capital Acquisitions Tax Consolidation Act 2003, VAT Regulations 2006 and consolidations in the excise area over a number of Finance Acts from 1999 to 2005. This legislation dates back to 1876 with many amendments and frequent cross-references in other (non customs) legislation over the years and there is a clear need to rationalise and modernise this legislation. The consolidated legislation must also "fit" with the EU legislation which covers many aspects of customs. The consolidation programme is on schedule for enactment in 2009.

14 Collections or suites of employment legislation

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5.3.6 Financial Services The McDowell Report on the establishment of a single regulatory authority for the financial sector recommended that when the required amending legislation had been enacted to provide for the creation of a single regulator and related structures, the legislation governing the regulation of the financial sector should be consolidated. The single regulator has been provided for through the Central Bank and Financial Services Authority of Ireland Acts of 2003 and 2004. The current position is that the legislation under which the Financial Regulator operates is scattered across some 28 different Acts and 36 Statutory Instruments/Orders. An Advisory Forum on Financial Legislation (AFFL) was established in November 2007 to provide expert advice to the Department of Finance on the preparation of the necessary consolidation, whilst undertaking complementary modernisation and simplification of this legislative framework.

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Appendix A

Membership of the High-Level Group Sean Gorman (Chairman)

Secretary General Department of Enterprise, Trade and Employment

Liam Berney Union Services Officer

Irish Congress of Trade Unions

Patricia Callan

Director Small Firms Association

Marie Daly

Head of Legal and Regulatory Affairs

Irish Business and Employers’ Confederation

Pat Delaney

Director of Business Sectors

Irish Business and Employers’ Confederation

Gearoid Doyle

Founder Kinsale Capital

Pat Farrell

Chief Executive Officer

Irish Banking Federation

Mark Fielding

Chief Executive Officer

Irish Small and Medium Enterprises

Liam Irwin

Commissioner Revenue Commissioners

Philip Kelly

Assistant Secretary Department of the Taoiseach

Irene Lynch Fannon

Professor of Law Faculty and Department of Law, UCC

Steve MacFeely

Director, Business Statistics

Central Statistics Office

Ann Nolan

Assistant Secretary Department of Finance

Tom O’Mahony

Assistant Secretary Department of the Environment, Heritage and Local Government

Breda Power

Assistant Secretary Department of Enterprise, Trade and Employment

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Appendix B Suggestions by the Business Sector for Reducing Administrative Burdens

1 Employment Law Suggestion by Business Source Comment by Regulating Body Action/Timeline “Publish ground rules for Work Permit decisions”.

Workshop New administrative arrangements were introduced in Q1 2007 on foot of Employment Permits Act 2006. Details and policies posted on www.entemp.ie.

Already Done.

“Re-instate Intra-Company Transfer Scheme”.

Workshop Revised Intra-Company Transfer Scheme re-introduced with new Employment Permits arrangements. Details on www.entemp.ie.

Already Done.

“DETE should clarify the process for work permits as well as supply an online facility for application; the fee should also be reduced so as to cover costs only”.

Small Firms Association (SFA)

New administrative arrangements for permits on foot of the Employment Permits Act 2006 were introduced in Q1 2007 and details are available at www.entemp.ie. Meetings have taken place with IBEC in relation to ongoing clarification of the administration of the permit schemes. It is planned to tender for the build of a new IT Permit Management system including front-end online facility in Q2 2008.

Being pursued by the Department of Enterprise, Trade and Employment (DETE). (See Section 2.1.8 of this Report).

“Measure the administrative cost of all employment law”.

Workshop The administrative burden will be costed. Being pursued by the High-level Group. (See Sections 4.1 and 5.3.1 of this Report).

“The OWT1 form, relating to employee timesheets,

Small Firms Association

DETE will examine this recommendation, in consultation with the social partners. It will be necessary to determine what practical

Remains under consideration by DETE and

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Suggestion by Business Source Comment by Regulating Body Action/Timeline should be simplified”. (SFA) modifications/adjustments are possible, bearing in mind that in

specific dispute cases, the Rights Commissioners may have recourse to information recorded on the OTW1 Form. Note: Based on the current Regulation, an employer does not need to record times on the OTW1 Form where an employer has clocking in facilities.

will be re-visited by the High-level Group in the coming year.

“The requirement for time-sheets (OWT1) should be scrapped”.

Irish Small and Medium Enterprises Association (ISME)

See above.

As above.

“Clarify/Simplify/Ease Working Time requirements as applied to all firms – its not being applied”.

Workshop Explanatory booklets and leaflets on the Organisation of Working Time Act 1997, couched in non-legal language, are available from the National Employment Rights Authority (NERA) and are backed up by a dedicated Information Unit in NERA.

As above.

“Decisions by the Employment Appeals Tribunals and the Rights Commissioner Service should be published on the internet”.

Irish Small and Medium Enterprises Association (ISME)

Current determinations of the EAT are available on their website. Work is ongoing on up-loading older Determinations. The decisions of Rights Commissioners are confidential to the parties concerned. However, it is the intention of the Commission to compile a digest of the decisions of Rights Commissioners, together with some commentary, and to publish such material on a regular basis.

Already done for current Determinations.

“Employment law is very complex. There is a need for advice to be given, particularly to small retailers, in an intelligible

RGDATA The new National Employment Rights Authority (NERA) disseminates information on employment rights through a wide range of media including from telephone enquiries, a dedicated Information Unit, Information Booklets, website and via national radio, television and national newspapers.

Being pursued by NERA.

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Suggestion by Business Source Comment by Regulating Body Action/Timeline manner”.

“Employment and Health & Safety legislation should be consolidated into one act. Currently there are 25 Acts and 8 bodies”.

Chambers Ireland

Preparatory work has commenced for up-dating and consolidating employment legislation. Current primary legislation in this area is contained in more than 20 enactments, the earliest of which dates from 1946. This reform will be advanced as an immediate follow-on to the Employment Law Compliance Bill and pursuant to Section 16.3 of Part 2 of ‘Towards 2016’. A modern, up to date, framework Act, - the Safety Health and Welfare Act 2005 - has been put in place, following an extensive review by a tripartite review group. This has been supplemented by new revised sectoral secondary legislation on safety and health at work.

Being pursued by DETE. (See Section 5.3.3 and 5.3.4 of this Report).

“The weekly work maximum should be averaged over 12 months, not 4”.

Irish Small and Medium Enterprises Association (ISME)

Currently an amending Organisation of Working Time Directive is under discussion at the EU Council of Ministers and EU Parliament which includes provisions in relation to a 12 month averaging period.

Under consideration at EU level. The High-level Group will be kept up to date in the coming year.

“Employment Agency annual licences – only notify where there are changes”.

Workshop Proposals for an Employment Agency Regulation Bill which will modernise the regulation of the employment agency sector have been recently finalised and a General Scheme of Bill was approved by Government which has been forwarded to the Office of the Parliamentary Counsel for drafting.

Under consideration by DETE. It is expected that the Bill will be published in 2008.

34

2 Health & Safety Suggestion by Business Source Comment by Regulating Body Action/Timeline “The requirement for a company to carry a safety statement that refers to each individual job the company is doing should be modified where the process is similar in each case”.

Irish Small and Medium Enterprises Association (ISME)

Not all employers need to have an individual safety statement. Compliance with an approved code of practice (as in the case of agriculture) obviates the need to have an individual safety statement (S. 60 of the 2005 Act) Each individual job does not need a safety statement. Where there are jobs of a similar nature these jobs can be grouped together showing the hazards, risks and controls for these jobs. Experience of the operation of the safety statement requirement is that it poses a major challenge for self-employed and small companies. In order to assist such companies, the Health and Safety Authority has published guidance setting out model safety statements covering the most common hazards in several employment sectors.

To be examined by DETE as part of the measurement of administrative burden in the Health and Safety area generally. (See Sections 4.1 and 5.3.1 of this Report).

“The Health and Safety Authority should issue new sectoral codes in plain language for small companies, outlining a step-by-step guide to the safety statement and other H&S issues”.

Irish Small and Medium Enterprises Association (ISME)

The Health and Safety Authority recognises the need for guidance designed to help small companies manage health and safety in a practical and cost-effective way. The Authority is committed to consulting with the relevant parties to achieve this recommendation. The process of producing such guidance is already underway.

Being pursued by HSA/DETE. The High-level Group will be kept up-to-date in the coming year.

“Health & Safety regulation must be examined, rationalised and reduced”.

Construction Industry Federation

Considerable work has already been done in simplifying and consolidating relevant legislation and this process is continuing. A major review of the primary legislation requirements resulted in the drafting and subsequent passing by the Oireachtas of the Safety, Health and Welfare at Work Act 2005. Following on from the 2005

Already done but kept under review by DETE. (See Section 5.3.3 of this Report). The Safety, Health and Welfare at Work Act 2005

35

Suggestion by Business Source Comment by Regulating Body Action/Timeline Act, the revised, restructured and consolidated Safety, Health and Welfare at Work (General Application) Regulations 2007 came into operation from 1 November 2007. The legislation is supplemented by sector specific secondary legislation and codes of practice covering the sector specific safety aspects. Detailed guides have also been produced by the Health and Safety Authority.

also provides that the Health and Safety Authority keep occupational safety legislation under review.

“Calculate the cost of H&S requirements”.

Workshop An economic impact assessment was carried out by Indecon Consultants in 2006, this report is available on www.entemp.ie.

To be reviewed by DETE. (See Sections 4.1 and 5.3.1 of this Report).

“Review cost/benefit of Safe Pass”

Workshop The Safe Pass Scheme is administered by FÁS. To be pursued by DETE. The High-level Group will be kept up to date over the coming year.

“Examine risk-based enforcement in HSA, ODCE, and NERA. Benchmark against Revenue”

Workshop To be pursued by DETE. The High-level Group will be kept up to date over the coming year.

36

Suggestion by Business Source Comment by Regulating Body Action/Timeline “Reporting requirements for minor accidents (those that require only a few days off work) should be eased; there should be a second category for serious cases involving hospitalisation”.

Irish Tourist Industry Confederation (ITIC)

The information obtained through the reporting of accidents helps to identify the causes of an accident and may help to ensure that similar accidents are prevented in the future. The Authority needs this information to determine its future focus. Using the Authority’s online system for reporting accidents can ease the administrative burden on employers.

To be examined by DETE as part of the measurement of administrative burden in the Health and Safety area generally (See Sections 4.1 and 5.3.1 of this Report).

“The requirement for consultation for smaller companies under the Health & Safety Act should be scrapped”.

Irish Small and Medium Enterprises Association (ISME)

There is a legal requirement on employers to consult with their employees in establishing arrangements for securing co-operation in the workplace on safety, health and welfare. Worker safety law applies to all sectors and to companies of all sizes. It is not Government policy to exempt any size of company from the provisions of worker safety law. Moreover, EU law would also prohibit such an exemption.

This is a policy issue and is outside the remit of the High-level Group.

“Where a company has insurance based on meeting H&S requirements it should not be inspected”.

Workshop It is not realistic to implement such a proposal as it would, in effect, exempt a company from inspection by the statutory inspection and enforcement authority for health and safety.

No action proposed.

37

3 Statistics

Suggestion by Business Source Comment by Regulating Body Action/Timeline “Each Department should have a liaison officer as a point of contact with the CSO”.

Small Firms Association (SFA)

CSO has very close relationships with many Departments, either through formal liaison groups or through regular contact.

The High-level Group supports the suggestion and advises that all Depts/Agencies appoint formal liaison officers with CSO.

“CSO should amend questionnaires to align more closely with company accounts”.

Irish Small and Medium Enterprises Association (ISME)

In recent years, CSO has adopted terminology to try and align better with standard accounting nomenclature. We are currently in the process of redesigning our annual business inquiry forms to try and make them resemble more a Profit and Loss and Balance Sheet approach. CSO is getting assistance from an accountant with this endeavour. Although when its proposed redesigned forms are complete it will be happy to seek the opinion of the High-level Group. However, in most cases the contents are not negotiable, in that CSO, on behalf of Ireland, is obliged to compile data (under EU law) to a strictly defined level of quality.

To be pursued by the High-level Group and CSO. See also position on XBRL in (Section 3.3 of this Report).

“CSO form on vehicle destinations very onerous”.

Workshop The data required by the National Road Freight Survey (RFS) is largely determined by the EU. In recent years there have been considerable demands to provide additional data from an energy consumption, environmental and regional planning perspective. Given the increasing demands for spatial-transport data in general and freight data in particular it is very difficult to see any

To be kept under review by the High-level Group and CSO.

38

Suggestion by Business Source Comment by Regulating Body Action/Timeline way of cutting back on the RFS.

“CSO: why is Annual “Services Inquiry necessary in addition to quarterly surveys”.

Workshop Currently, the ASI data collection is governed by a number of EU regulations. A new overarching piece of legislation concerning structural business statistics has recently been passed by the European Council and should come into effect this year. This new legislation will dramatically increase the data demands that Ireland is required to provide to the European Commission and European Central Bank. Many of the data required are either not available on a sub-annual basis or are very difficult to compile e.g. changes to capital assets. Also, annual data returns are frequently more accurate as they come from financial accounts and tend to match with returns to CRO and Revenue. For this reason, most data required by CSO are only compiled on an annual basis. In future, there will be an increasing emphasis on annual data, while greater effort will be made to estimate detailed sub-annual data.

To be kept under review by the High-level Group and CSO.

“ProdCOM form does not take account of format in which data is held”

Workshop The ProdCOM form is very basic and only asks 2 questions. Again, it should be noted that the ProdCOM requirements are defined by EU Council Regulation (EEC) No 3924/91 of 19 December 1991.

To be kept under review by the High-level Group and CSO.

39

Suggestion by Business Source Comment by Regulating Body Action/Timeline “Consolidate some of the seven annual returns to CSO”.

Workshop There are a number of annual inquiries that will be integrated between now and 2011. This process is part of a wider integration process, integrating both short-term and structural datasets.

To be kept under review by the High-level Group and CSO.

“Reduce (EU) Intrastat and VIES (VAT) frequency of returns”.

Workshop Intrastat is a joint CSO – Revenue Commissioner monthly survey introduced in January 1993 to compile trade statistics following the introduction of the EU Single Market. For Non-EU trade, which accounts for approximately 40% of all international trade, CSO uses existing administrative data (the Customs Single Administrative Document) to compile this element of trade and consequently imposes no additional burden on respondents. There are currently efforts to lessen the response burden on traders at a European level by simplifying the Intrastat system. Statistical Returns is one of the areas to be targeted by the European Commission for reducing administration burdens by 25% (See Section 5.1 of this Report).

To be kept under review by the High-level Group and CSO.

40

4 Company Law

Suggestion by Business Source Comment by Regulating Body Action/Timeline “Consent procedures should be adopted in lieu of disqualification and restriction (of directors) orders. Experience in the UK suggests that over 80% of disqualifications are achieved with the consent of the party involved”.

Office of the Director of Corporate Enforcement (ODCE)

The Company Law Review Group has recommended this approach. In the general sphere of the Companies Consolidation and Reform Bill. (See Section 5.3.2 of this Report).

Being pursued by DETE. The Companies Bill is expected to be enacted in 2010.

“The Consolidated Companies Act should be divided into two sections; one for PLCs, the other for SMEs”.

Irish Small and Medium Enterprises Association (ISME)

This is the approach to be taken in the new Companies Bill, which is currently being drafted.

Being pursued by DETE. The Companies Bill is expected to be enacted in 2010

“For cost reasons, it is desirable that particular remedies under the Companies Acts, which at present can be granted only by the High Court, should — in appropriate cases — be capable of being dealt with also at District and/or Circuit Court level”.

Office of the Director of Corporate Enforcement (ODCE)

The Company Law Review Group has recommended this approach in the new Companies Bill.

Being pursued by DETE. The Companies Bill is expected to be enacted in 2010.

“Audit exemption should be given to SMEs from the annual statutory audit. The threshold for audit

The Institute of Chartered Accountants in Ireland

Company Law Review Group has recommended this approach in the new Companies Bill.

Being pursued by DETE. The Companies Bill is expected to be enacted in 2010.

41

Suggestion by Business Source Comment by Regulating Body Action/Timeline exemption placed on limited liability companies in Ireland should be raised to the maximum permitted under EU law (as is the case in the UK). Should there be an unwillingness to raise it to this level, serious consideration must be given to other assurance models”.

(ICAI)

“Legislation should be drafted in clear and simple language. A review process should be initiated to rewrite key areas of legislation so that end-users can more easily understand their rights, obligations and entitlements”.

Office of the Ombudsman

While the benefits to business and business practitioners is obvious, this can only be considered on a case by case, law by law, section by section, basis, and falls outside the scope and capabilities of the High-level Group.

“The remit of the Company Law Review Group should be extended to “All Law”, with a view to simplification or removal, where appropriate”.

The Association of Chartered Certified Accountants (ACCA)

This is a policy decision. In reality there is no question of widening the remit of the CLRG outside of company law matters.

“Electronic filing of abridged accounts should be allowed”

Irish Small and Medium Enterprises Association (ISME)

Advocated by the High-level Group. (See Section 3.3 of this Report).

42

5 Taxation Suggestion by Business Source Comment by Regulating Body Action/Timeline “Revenue should make available contact details for recognised subject-matter experts in each of the regions”.

Institute of Chartered Accountants Ireland (ICAI) and Consultative Committee of Accountancy Bodies — Ireland (CCAB-I)

Revenue has created a new Technical Service (RTS) in each of the four Regions to handle complex technical issues on which practitioners and business taxpayers may need clarity. RTS Guidelines were published in June 2007. The guidelines were drafted in consultation with CCAB–I via the Tax Administration Liaison Committee (TALC). Contact details for RTS are included in the guidelines.

Already done.

“Some of the mandatory fields in ROS (Revenue On-line Service) are not suitable for small companies and should be suppressed.”

Irish Small Medium Enterprises (ISME)

With effect from December 2006 there are only 5 mandatory fields in ROS (Turnover, Gross Profit, Salaries, Net Profit and Shareholders Funds). Construction companies also have to complete the sub-contractors field. The 5 items are basic accounting items that are required under the Companies Acts.

Already done.

“VAT should be remitted only when payment has been received; at minimum, the turnover limit should be raised to €1m.”

Irish Tourist Industry Confederation (ITIC)

The annual VAT cash accounting threshold for businesses was increased from €635,000 to €1,000,000 with effect from 1 March 2007.

Already done.

“The VAT registration threshold should be increased from €27.5k to €35k for services and from €55k to €70k for goods.”

Irish Small and Medium Enterprises Association (ISME)

The VAT registration thresholds for businesses increased from €27,500 to €35,000 in the case of services, and from €55,000 to €70,000 in the case of goods with effect from 1 March 2007. The VAT registration thresholds were further increased to €37,500 in the case of services, and to €75,000 in the case of goods, with effect from 1 May 2008. Less frequent filing of VAT3 returns reducing administrative

Already done ( See Section 2.1.5 of this Report).

43

Suggestion by Business Source Comment by Regulating Body Action/Timeline burden for approximately 70,000 businesses came into effect in 2007.

“The Small Firms Association (SFA) also supports the Small Business Forum recommendation to allow preliminary payment of corporation tax for companies with a tax liability less than €100k, up from the current €50k.”

Small Firms Association (SFA)

The corporation tax liability threshold for treatment as a small company is being increased from €50,000 to €150,000 effective from preliminary tax payment dates arising after 6 December 2006. This threshold was increased further to €200,000 effective from preliminary tax payments dates arising after 5 December 2007. Over 97 per cent of Irish companies will have the benefit of the simpler and more straightforward system.

Already done.

“The Small Firms Association also supports the SBF recommendations to increase turnover thresholds for VAT; raise the threshold for using the cash basis of accounting for VAT (for non-retail businesses) to at least €1m.”

Small Firms Association (SFA)

The VAT registration thresholds for businesses increased from €27,500 to €35,000 in the case of services, and from €55,000 to €70,000 in the case of goods with effect from 1 March 2007. The VAT registration thresholds were further increased from to €37,500 in the case of services, and to €75,000 in the case of goods with effect from 1 May 2008. The annual VAT cash accounting threshold for businesses was increased from €635,000 to €1,000,000 with effect from 1 March 2007. Less frequent filing of VAT3 returns reducing administrative burden for approximately 70,000 businesses came into effect in 2007.

Already done.

“Enterprises should be given a tax clearance number to substitute for the requirement for transferring a Single Tax Clearance

Irish Tourist Industry Confederation (ITIC)

Public bodies and applicants can view a current tax clearance certificate online, with the permission of the applicant, through the use of a tax number and PIN number supplied by Revenue to the Applicant.

Already done (See Section 2.1.3 of this Report).

44

Suggestion by Business Source Comment by Regulating Body Action/Timeline Certificate between state bodies.”

Revenue issued a letter to all Government Departments in November 2007 advising them of the availability of the on-line verification facility and encouraging Departments and Public Bodies under their aegis to use the facility to the fullest extent possible.

“More use must be made of data content already submitted.”

Institute of Chartered Accountants Ireland (ICAI) and Consultative Committee of Accountancy Bodies — Ireland (CCAB-I)

Revenue is open to data sharing with other Government Agencies that use similar data.

The potential of data sharing between Revenue, CSO and CRO is being explored in the work programme of the High-level Group. (See Sections 3.1 and 3.2 of this Report).

“ROS should be extended to Income Tax.”

Institute of Chartered Accountants Ireland (ICAI) and Consultative Committee of Accountancy Bodies — Ireland (CCAB-I)

ROS currently caters for over 20 taxes and duties including self-assessed income tax and PAYE. The system is constantly under review and regular enhancements are made. For example the June 2007 ROS release provided for non-resident filing. There is regular contact – generally via the TALC1 process – on ROS issues and ROS developments. Revenue welcomes the feedback received on ROS and the user feedback has helped build the ROS system that is in existence.

Largely delivered. Ongoing development of ROS and increased usage of ROS are priorities for Revenue. Future development plans include eStamping by the end 2009 and eRCT in 2010.

“The process regarding Relevant Contracts Tax

The Institute of Certified Public

A project to streamline and simplify RCT administration using ROS is underway with a view to delivery in 2010. Consultation

Underway with a view to delivery in 2010. The High-

1 Taxation Administration Liaison Committee The Taxation Administration Liaison Committee (TALC) was established in 1988 and involves senior representatives from the Irish Taxation Institute, the main Accountancy Bodies, the Incorporated Law Society of Ireland and Revenue. The main objective of TALC is to provide a standing consultative forum for the exchange of views on tax administration issues. The committee holds regular plenary meetings and also works through subcommittees dealing with specific issues including audit, collection and technical agendas and simplification.

45

Suggestion by Business Source Comment by Regulating Body Action/Timeline should be simplified and a Regulatory Impact Assessment (RIA) carried out.”

Accountants in Ireland (CPA) Workshop

on this project will be extensive. The changes under consideration are likely to involve fairly substantial amendment to the existing RCT legislation/regulations with the approval of the Minister for Finance.

level Group will be kept up to date.

“Form 46G should be scrapped because of duplication.”

Irish Small and Medium Enterprises Association (ISME)

Form 46G is the Return of Third Party Payments which returns details of payments in excess of €3,810 for certain services received by the company. There may be scope to review Form 46G and streamline how the data are collected or transmitted to Revenue in order to make compliance easier.

Review of Third Party Returns has commenced. Revenue will keep under review. The High-level Group will be kept up to date.

“Technical guidance available on the Revenue website should be time-stamped and obsolete content removed.”

Institute of Chartered Accountants Ireland (ICAI) and Consultative Committee of Accountancy Bodies — Ireland (CCAB-I)

Revenue is conducting a major redesign of its website to improve the quality, timeliness and presentation of information and services. The tender has been awarded for the redesign project and work is commencing. Completion is scheduled for the end of September 2008. A programme is already underway to update all technical guidance documentation on the website and the date of update will be provided in each instance. Obsolete documents are being deleted as they are identified. Research is being undertaken into the most effective and accurate method of ensuring that all documents on the web are kept up to date on an ongoing basis with a view to implementation as soon as the current project is completed.

Ongoing throughout 2008. Revenue will keep under review and keep the High-level Group up to date.

“Existing compliance records should be recognised when VAT registration applications are

Institute of Chartered Accountants Ireland (ICAI)

Revenue’s objective is to deal with VAT registration applications as quickly as possible. However the issue of a VAT number is of fundamental importance and ownership of a VAT number can, of course, be highly valuable for a business. In

Revenue is examining ways to simplify CT and VAT registration and will keep this under review. The High-

46

Suggestion by Business Source Comment by Regulating Body Action/Timeline made.” “The process for handling requests for tax registration and VAT numbers should be improved. “ “Registrations applied for by accounting firms should be fast-tracked; account should be taken of due diligence already undertaken under money-laundering regulations, etc.” “Simplification of the revenue system is necessary in some cases; e.g. S4A relief. This relates to delays with the VAT registration process and possible inability to avail of S4a shift mechanism relief.”

and Consultative Committee of Accountancy Bodies — Ireland (CCAB-I) The Institute of Certified Public Accountants in Ireland (CPA)

that context, and to guard against spurious applications for VAT numbers and combat VAT fraud generally, it is necessary to balance the need to expedite the processing of registration applications with the need to ensure that VAT numbers are issued only where they should be. A number of issues raised regarding VAT and CT registrations are being explored further by Revenue and the Taxation Administration Liaison Committee in the simplification context. Future online development plans include e-registration for the main business taxes. This will involve a phased implementation process commencing by the end of 2009.

level Group will be kept up to date.

“Forms 11, 12 and 46G should be reviewed”.

Workshop Form 11 can now be filed via ROS. The 2008 Form 11E (shorter version) will issue to a much larger number of customers in 2009. Form 12 is required from approximately 50,000 out of 2.2m

Revenue will keep these forms under review and keep the High-level Group up to date.

47

Suggestion by Business Source Comment by Regulating Body Action/Timeline PAYE customers. 46G cannot be filed via ROS. There may be scope to review the 46G and streamline how the data is collected/transmitted to Revenue in order to make compliance easier.

“Revenue should develop the concept of “technical adjustments” whereby tax can be paid late without penalty or interest in the case where a transaction has been handled incorrectly in error.”

Institute of Chartered Accountants Ireland (ICAI) and Consultative Committee of Accountancy Bodies — Ireland (CCAB-I)

This has also been raised at TALC and will be considered by Revenue in the review of the ‘Code of Practice for Revenue Auditors’.

Revenue will keep this under review and keep the High-level Group up to date.

“Revenue visits to start up businesses should be re-instated”.

Institute of Chartered Accountants Ireland (ICAI) ICAI & Irish Small and Medium Enterprises Association (ISME)

The level of new income tax/corporation tax registrations (not necessarily all new businesses) is in the region of 7,000 per month. Revenue does carry out some new business visits but cannot commit to visiting every new business. However, reducing the administrative burden on business is a key aspect of Revenue’s forthcoming Statement of Strategy. This will also be explored via TALC.

Initiatives aimed at assisting new business will be considered by Revenue. The High-level Group will be kept up to date.

“Reduce number of times per annum which companies have to consider Capital Gains Tax”.

Workshop As this is a tax policy issue and not simply an administrative burden, it is outside the remit of the High-level Group.

“Revenue should publish Institute of There have been some developments for practitioners or There are ongoing

48

Suggestion by Business Source Comment by Regulating Body Action/Timeline details of their telephone usage policies. Refers to dedicated phone lines for accountants/practitioners, publicising telephone policies and email acknowledgement of calls and contacts.”

Chartered Accountants Ireland (ICAI) and Consultative Committee of Accountancy Bodies — Ireland (CCAB-I)

business taxpayers – namely the establishment of the Revenue Technical Service (RTS) (written only correspondence, given the subject matter) and the introduction of secure email and the recent Employer Helpline. There is a significant amount of information on phone contacts on Revenue’s website (including the Contact Locator). Given the volume of correspondence and telephone calls that Revenue receives annually it would be difficult to acknowledge all contacts with an email. Customer Service Standards are defined and results are published in Revenue’s Annual Reports.

developments in Revenue aimed at aligning and improving communication channels for customers and intermediaries.

“Acknowledgements of queries received should be issued by Revenue.”

Institute of Chartered Accountants Ireland (ICAI) and Consultative Committee of Accountancy Bodies — Ireland (CCAB-I)

Revenue has established a secure email channel to facilitate the new Revenue Technical Service (RTS) and which allows for acknowledgements. RTS queries are recorded on Revenue’s Integrated Correspondence (IC) system, which allows the query and reply process to be tracked.

Customer Service Standards applying to RTS queries are reviewed monthly by Revenue.

“All accounts extracts in ROS (Revenue On-line Service) should be able to be filed electronically.”

Irish Small and Medium Enterprise Association (ISME)

In principle there is no objection to this. However it would need to be agreed and planned with practitioners and business customers and incorporated into future ROS developments. This would be very much a long-term plan.

(See Section 3.1 of this Report).

“Reform of the system of applying VAT on an invoice basis”.

Dr. Jim Fitzpatrick

VAT registration and VAT cash accounting thresholds are continuously reviewed. Recent budget charges are included in Section 2.1.5 of this Report.

This is outside the remit of the High-level Group.

49

Suggestion by Business Source Comment by Regulating Body Action/Timeline The provisions regarding the invoice basis for VAT are set out in the EU VAT Directive 2006 with which Irish law must comply. Accordingly, there is no scope for fundamental reform. Irish law has been amended in recent years to facilitate electronic VAT invoicing, self invoicing and the issue of invoices by third parties to cater for new and emerging business models.

“Introduce ‘flat rate’ approach to VAT payments, as in UK”.

Workshop The question of introducing a 'flat rate' approach to VAT payments would be a policy matter for consideration by the Minister for Finance.

This is outside the remit of the High-level Group.

Regulatory Impact Assessments (RIAs) should be carried out on proposed future changes to tax law. UK revenue authorities have commissioned a study on compliance costs for small businesses.”

Institute of Chartered Accountants Ireland (ICAI)

A number of areas of legislation are exempted from the compulsory nature of Regulatory Impact Assessments, including the annual Finance Bill. However Revenue supports the principles of RIA where feasible, but subject to the reality that the RIA approach and/or the publication of RIAs may not always be appropriate in the case of tax law/regulations or the imposition of charges because of their sensitivity and the need to guard against possible evasion or avoidance. Revenue has, for example, conducted a RIA on proposals for changes to the betting returns system for the Bookmaking Industry.

This is a policy issue for the Minister for Finance and is, therefore, outside the remit of the High-level Group.

“Companies should be rewarded for use of ROS. There should be incentives for using the on-line tax system; e.g., by way of a one month extension.”

Institute of Chartered Accountants Ireland (ICAI) and Consultative Committee of Accountancy Bodies — Ireland (CCAB-I)

A number of studies have examined the regulatory and compliance burden on business (particularly small business) in the last couple of years. ROS is viewed favourably in these studies and gets high marks for its contribution to reducing the administrative burden. Self-employed customers who pay and file via ROS are afforded an extended 15-day deadline.

Consultations on introducing mandatory e-filing over a phased period have commenced. (See Section 3.1 of this Report).

“The tourism industry makes extensive use of part-time

Irish Tourist Industry

This is a policy issue for the Minister for Finance.

This is outside the remit of the High-level Group.

50

Suggestion by Business Source Comment by Regulating Body Action/Timeline and temporary staff. The income tax system for dealing with these should be simplified.”

Confederation (ITIC)

“New Benefit-in-Kind (BIK) arrangements places onus on employer.”

Workshop The policy change transferring responsibility for BIK from the employee to the employer was introduced in 2004. Revenue consulted widely with employers and employer representatives in the course of implementing the changes. In addition Revenue published the ‘Employer’s Guide to operating PAYE and PRSI for certain benefits’ to assist employers in implementing the associated changes (available at www.revenue.ie). A single point of telephone contact (Lo-call 1890 25 45 65) was also established to deal with all employer BIK enquiries. However if employers have identified specific areas of administrative simplification, Revenue would be willing to explore these.

This is a policy issue for the Minister for Finance and is, therefore, outside the remit of the High-level Group.

“Combine PRSI and Tax data for employees: PRSI classes should be simplified and clear guidance provided to employers; this should be combined with tax rates on the tax card.”

Workshop Simplification of the PRSI Classes is a matter for the Department of Social and Family Affairs. Any changes required are addressed through the established channels between DSFA and Revenue. A joint communication, for example, is issued each year to employers with the issue of Tax Credit Certificates. Revenue also launched a new telephone service providing a single point of contact dealing exclusively with all employer enquiries in November 2007.

Changes to PRSI classes is a policy issue for the Minister for Social and Family Affairs. However, the High-level Group proposes to explore any ‘administrative burden’ issues arising in conjunction with that Department.

51

6 Environment

Suggestion by Business Source Comment by Regulating Body Action/Timeline “The administration of trans-frontier waste shipment (TFS) should be centralized or co-ordinated by one regulatory body, e.g., the EPA”.

Irish Waste Management Association (IBEC)

This recommendation has been put into effect and Dublin City Council is the new central authority.

Already done.

“As part of its draft Waste Management (Facility Permit and Registration) Regulations, the Department of the Environment, Heritage and Local Government should ensure that clear guidelines are laid out for the appropriate authorities detailing how such permit applications should be evaluated and what timescales should be attached to the evaluation and approval process. The current S.16 of the draft Regulations satisfies this criterion and should be implemented fully in legislation”.

The Competition Authority

The revised Waste Management regulations will provide for this. Already done.

“Institute an Appeals system for Local Authority

Workshop Provision is already made for appeal of development contributions levied in certain circumstances. A developer may appeal in the

Already Done.

52

Suggestion by Business Source Comment by Regulating Body Action/Timeline development charges”.

cases of a special development contribution or the application of a ‘normal’ development levy where a developer feels the scheme has not been applied in accordance with the terms set out by the local authority. In addition, significant changes to the operation of development contributions to ensure greater transparency in the application of charges and to ensure greater public scrutiny and cross-sectoral participation in the preparation and adoption of development contribution schemes has recently been introduced.

“EU fire certificates should be acceptable in Ireland; UK certificates are currently insisted upon”.

Irish Tourist Industry Confederation (ITIC)

It is presumed that this relates to ENs (European Norms/ Standards) which do feature in design and fit out of buildings. There is no EU fire certificate system per se. A review of Technical Guidance Document B, Fire Safety, was undertaken in 2006 and a revised TGD B was subsequently published. One of the principal objectives of this review was to replace all reference to IS (Irish Standards) or BS (British Standards) in the TGD B with the EN equivalent. This was a significant change for the design and construction industries and is well bedded down at this stage so reference and certification of products to EN standards is now the norm.

Already Done.

“There should be a standard time limit for processing waste permits, such as 8 weeks”

Irish Waste Management Association (IBEC)

The revised Waste Management regulations will provide for this. (See Section 2.1.6 of this Report).

Already Done.

“Provision should be made to allow partial review of permits for small operational

Irish Waste Management Association

As above. Already Done.

53

Suggestion by Business Source Comment by Regulating Body Action/Timeline changes at permitted facilities”.

(IBEC)

“Waste carriers should be able to make a single application to cover all regions; the permit should detail company information rather than vehicle information”.

Irish Waste Management Association (IBEC)

The revised Waste Management provide for a single application to cover all regions and the requirements regarding vehicles will also be addressed.

Already Done.

“Permits should be flexible enough to allow for small changes such as the addition of a new vehicle”.

Irish Waste Management Association (IBEC)

The revised Waste Management regulations provide for this. Already Done.

“Licensing facilities (e.g., waste facility permits, waste collection permit administration and surveillance) should be transferred to the EPA”.

Greenstar Following on from a wide-scale public consultation which took place last year, the Minister for the Environment, is currently examining the various options as to how best the rapidly evolving waste market might be regulated in future. Work on the regulation of the waste management sector will progress in parallel with the international waste management policy review. The review will include in its scope an examination of the legal, institutional and infrastructure arrangements that apply to waste management.

To be pursued by the Department of the Environment, Heritage and Local Government. The High-level Group will be kept up to date.

“Enforcement should be risk-based. Reduced risk should be rewarded in licensing”.

Irish Waste Management Association (IBEC)

This is likely to be the way forward. The EPA is currently looking at risk-based approaches.

Being explored by the EPA. The High-level Group will be kept up to date

“The cost structure for enforcement should be transparent; as in the UK”.

Irish Waste Management Association

Being done, for example for Trans-frontier other costs are not passed on to any major extent and permit fees low enough.

Being reviewed by the EPA. The High-level Group will be kept up to date.

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Suggestion by Business Source Comment by Regulating Body Action/Timeline “Information required for licensing and enforcement should be necessary and only collected once”.

Irish Waste Management Association

There should be scope to reduce. The EPA is looking at risk-based approaches.

Being explored by the EPA. The High-level Group will be kept up to date.

“Trans-Frontier administration costs should be transparent and signalled in advance; as in the UK”.

Irish Waste Management Association

Industry is participating in a working group and also in the review of costs.

Being explored by the Department of the Environment, Heritage and Local Government. The High-level Group will be kept up to date.

“The competitive issues posed by the application of VAT to private operators, but not to public authorities should be dealt with”.

Irish Waste Management Association

This issue is currently being investigated by the Department of Finance following a complaint by a private sector operator.

Being pursued by the Department of Finance.

“The role of local authorities in the waste management sector should be clarified in new legislation”.

Irish Waste Management Association

Following on from a wide-scale public consultation which took place last year, the Minister for the Environment is currently examining the various options as to how best the rapidly evolving waste market might be regulated in future. As a consequence of these deliberations, the Minister will shortly be bringing policy proposals to Government. Work on the regulation of the waste management sector will progress in parallel with the international waste management policy review. The review will include in its scope an examination of the legal, institutional and infrastructure arrangements that apply to waste management. It is in the context above that the issue of any potential need to change the current arrangements will be addressed.

Outside the remit of the High-level Group as this is a matter of policy to be decided by Government

“Comparable public and Irish Waste As above. Outside the remit of the

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Suggestion by Business Source Comment by Regulating Body Action/Timeline private waste facilities should be subject to the same regulatory process; this should also be administered by an independent body such as the EPA”.

Management Association

High-level Group as this is a matter of policy to be decided by Government

“An appeals process should be put in place”.

Irish Waste Management Association

As above. Outside the remit of the High-level Group as this is a matter of policy to be decided by Government

“There should be a central authority with responsibility for issuing waste collection permits, such as the EPA”.

Irish Waste Management Association

As above. Outside the remit of the High-level Group, this is a matter of policy to be decided by Government

“Local authorities should be subject to the same requirement to obtain permits as the private sector, as this imposes an unfair cost on private sector firms”.

Irish Waste Management Association

As above. Outside the remit of the High-level Group as this is a matter of policy to be decided by Government.

“Information requirements from local authorities and the EPA should be co-ordinated to avoid duplication”.

Irish Waste Management Association

No action has been taken to date. There is merit in establishing a working group to examine this issue. Possible membership might include DEHLG, EPA, CCMA and representatives of industry.

The High-level Group to be updated by the Department of the Environment, Heritage and Local Government.

“A representative from the private sector should be invited to participate in each of the regional steering groups established

Irish Waste Management Association

Statutory responsibility for waste management planning resides with the local authorities and the determination of the composition of any structures employed to advance that responsibility is a matter for the authorities concerned.

Outside the remit of the High-level Group.

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Suggestion by Business Source Comment by Regulating Body Action/Timeline to oversee the implementation of the replacement regional waste management plans”. “Licensing costs should be transparent and signalled in advance”.

Irish Waste Management Association

Licensing is the statutory responsibility of the EPA. Costs will always be activity related, e.g. those associated with a landfill will obviously be greater than those associated with a small storage facility.

To be pursued by the EPA. The High-level Group will be kept up to date.

“The scope of enforcement needs to be widened beyond regulated facilities and collection services if the perception of sham regulation or paper regulation is to be avoided.”

Irish Waste Management Association

Scope being widened but majority of enforcement requirements are primarily focused on fixed facilities and transportation.

To be pursued by the EPA. The High-level Group will be kept up to date.

“The EPA should consider setting an overall target for reducing the regulatory burden on businesses in Ireland; as in Denmark and the UK.”

Irish Waste Management Association

To be pursued by the High-level Group, Department of the Environment, Heritage and Local Government and the EPA.

“There should be better co-ordination between regulators across the whole waste sector.”

Irish Waste Management Association

The EPA, through its Enforcement Network, is aiming for such consistency.

To be pursued by the EPA. The High-level Group will be kept up to date.

“DOE should carry out a RIA on WEEE legislation in relation to smaller firms with a view to reducing the onerous burden of administration.”

Irish Small and Medium Enterprise Association (ISME)

The WEEE Directive is undergoing review and the European Commission undertakes stakeholder consultations from time to time. As part of this review an impact assessment will be undertaken and will include an examination of the impact on SMEs within the EU27. Any review of the transposing legislation will be based on the result of the Commission’s review of the Directive.

Being pursued by the Department of the Environment, Heritage and Local Government. The High-level Group will be kept up to date.