Archive for the ‘Managing Cashflow’ Category

Sources of Enterprise Funding Available for Businesses turned down by Banks

May 15, 2014


Do you need help bridging a financial gap for your business, but the bank has turned you down? Don’t be disheartened; there are other sources of funding that might be able to help.

Quintas partner Yvonne Barry helps small to medium enterprises (SMEs) find funding when banks have said no. She’s a non-executive director of Microfinance Ireland, and also the Chairperson of Cork Foundation.

Microfinance Ireland (MFI) is a not-for-profit lender; established to deliver the Government’s Microenterprise Loan Fund. The fund forms part of a suite of financial schemes provided through the Department of Jobs, Enterprise and Innovation to help businesses across all industry sectors.

“Many people have start-up or growing enterprises that may be commercially viable and need a loan, but don’t meet the conventional criteria required by banks”, explains Yvonne. “MFI has a much higher risk appetite; and are not profit oriented so the parameters are different. Helping create or sustain jobs is at the heart of what we do.”

Launched a year ago, MFI provide loans up to €25k for business of fewer than 10 employees; with an interest rate of 8.8% to be repaid over 3 – 5 years.

You’ll still have to show evidence of cash flow; turnover and a solid business plan, you can apply directly or via your local enterprise board who will help you with the application process.

The Cork Foundation can also help by providing access to funds for investment in Cork enterprise.

With some impressively experienced strategic advisors on the board, the Foundation works on finding funding solutions outside existing models. A unique aspect of the Cork Foundation is that it is self-funded through contributions from the Cork/Irish Diaspora, Cork based businesses and philanthropists. We aim to connect contributors directly to private and community enterprises in Cork City and County.

“Applying for a loan is an arduous and daunting prospect; and being turned down is very dispiriting”, says Yvonne. “We’d like to see more people realise that there is funding out there”, says Yvonne, “Nobody is going to drop it into your lap; as with most things worth fighting for, it’ll take an extra bit of drive to get it over the line!”

An entrepreneurial spirit; a passion for your business and the commitment to make it work are what success stories are made of.

For further information call Yvonne Barry at Quintas on 021 464 1400

Article as recently featured in the Cork News.



January 31, 2013

1336692185QCT392Starting up your own business can be a daunting task for anyone, and unless you are an accountant, the bookkeeping and accounting element of a new start-up can be especially testing. The current environment is posing significant challenges to new, small businesses, therefore getting all of your ducks in a row on start-up is vital. One of the most important “ducks” is your accounts. The following are some useful start-up tips that every individual should consider:-

  1. Start Off on the Right Foot

Make your business accounting function a habit. Set aside a regular time period every week to gather your records together, check and file documentation, invoices and bank statements.

  1. Separate your Banking Activities

Small business start-ups, especially sole traders, often use their existing private bank accounts to conduct their business activities. By keeping separate bank accounts for your business and personal activities, you will save yourself (or your bookkeeper) hours of work analysing transactions that have nothing to do with your business.

  1. Keep it Simple

Do not overcomplicate your structures or records. It will only become confusing and end up distracting you from what’s important.

  1. Value Good Advice

Get professional financial advice early in your start-up process. A little money spent early on can save a fortune correcting possible mistakes down the line.

  1. Software Packages

There are many very good accounting/bookkeeping packages out there, some of which are very inexpensive, are relatively easy to use straight out of the box, and will do everything a small business would require, including Sales Invoicing, Debtors and Creditors Control, Bank Reconciliation and VAT Returns. Consult your financial advisor as to which package best suits your needs.

  1. Don’t forget to get paid

This might seem obvious, but if you are not regularly tracking your invoices and debtor balances, invoices, and by default, payments will be missed. Months of extra credit will be lost to customers. The vast majority of customers will not volunteer payments and will need, at the very least, regular statements and gentle reminders.

  1. Sales to family and friends – Value Your Service/Product

Do not be afraid to ask for payment for services or products supplied to family or friends. Offer a discount if you wish, but value the work, service or product that you provide.

Starting your own business presents a significant number of challenges to even the best entrepreneur. Whether it’s Accounting, Marketing, Product Development, Sales, Manufacturing, Banking, etc., early planning and organising will help you face those challenges in a properly prepared manner.


Eugene O’Callaghan

Eugene is a Partner at Quintas.

The views expressed in this article are not reflective of the views or opinions held by Quintas. The material contained herein includes facts, opinions and recommendations which we neither guarantee the accuracy, completeness or timeliness of, nor do we endorse. We do not accept any liability for any act, or decision not to act, use, misuse or distribution resulting from use of this material”.

Have you set Financial Goals for your Business in 2013?

January 24, 2013

1338615605yGFYQVPlanning is one of the most important parts of running a business, be it a multinational business or a small business. No business can thrive without setting realistic financial goals. A set of financial goals is like a road map for a business, always providing a progress report on where a business is at and where it is going. Starting without a roadmap is a risk and whilst you may eventually reach your final destination, don’t be surprised if you get lost along the way.

Here are a couple of the key stages to assist you in setting your goals:

  • Set aside a couple of hours in your weekly diary to work on your Financial Plan for 2013. Something as simple as the first two or three hours on a Monday morning might be suitable. Remember you will need to keep this weekly timeout in 2013 to review actual performance v’s plan.
  • The first step for setting financial goals is to calculate your monthly break-even amount. This is the income you have to generate if you don’t want to lose money. To calculate this you’ll need to list all your expenses. This might seem odd but the first expense you need to calculate is the personal expense of the business owner. Without this it is impossible to calculate the salary that must be taken from the business to cover basic living expenses.
  • Next calculate your fixed costs. Fixed costs are expenses incurred each month that would not be easy to get rid of – office rent, staff salaries, light & heat etc.
  • Now that you know what your fixed costs are you are ready to calculate a minimum income goal. Naturally your aim is to make a profit so add the target profit to the minimum income goal to arrive at the overall income goal.
  • Don’t forget to provide for cost of goods sold where applicable. If your average Gross Profit Margin is 40% and your annual income goal is €200k to cover your costs and profit, then your target sales will need to be €500k to allow for the purchase cost of the goods you have sold.
  • Finally break down your income goal into manageable bite sizes, spread throughout the year and adjust where necessary for seasonal fluctuations.

Once you have managed to set out your financial plan for 2013, don’t let it gather dust on a shelf in the corner of the office. Use the plan as a benchmark against actual performance on a weekly and monthly basis.


Paul O’Connell

Paul is a Director at Quintas.

The views expressed in this article are not reflective of the views or opinions held by Quintas. The material contained herein includes facts, opinions and recommendations which we neither guarantee the accuracy, completeness or timeliness of, nor do we endorse. We do not accept any liability for any act, or decision not to act, use, misuse or distribution resulting from use of this material”.

The advantages of EII for saving tax and raising finance.

November 8, 2012

To try and assist with the flow of investment funds, in last year’s budget the Government replaced the old Business Expansion Scheme (BES) with the Employment and Investment Incentive (EII). The main changes between BES and EII are

 1.       The investment term is reduced from 5 years to 3 years

2.       The scheme is now open to the majority of companies (some exceptions apply) as opposed to BES which was restricted to qualifying trades such as manufacturing and internationally traded service companies

3.       The amount that a company can raise under the scheme has been increased from €2m to €10m, subject to a maximum of €2.5m in any 12 month period

4.       Eligible investors may avail of tax relief up to 41%, with 30% in the year of subscription and a further 11% at the end of the holding period, subject to conditions been achieved in relation to an increase in employment levels in the company or funds been spent on research and development.

 Qualifying companies can raise EII money directly from Investors or seek money from an EII Fund. The Quintas Wealth Management (QWM) BES/EII fund was established in 2008 and over the last few years we have invested c. €7m in 12 companies. These companies are located around the country and in different sectors i.e. medical services, medical devices, broadband/connectivity, renewable energy etc.

 The principal advantages of a Fund investing directly in a qualifying EII company is that your money is spread across a number of companies in different sectors, with the companies vetted and monitored by experienced personnel. Generally we would review 15/20 proposals before choosing to invest in 4 companies. The Fund aims to invest in companies with the following criteria:

 1.       Capable and experienced management team

2.       Past the initial start up loss making phase

3.       At commercial volumes of production

4.       Seeking funds to expand or take over another business

5.       Not carrying too much debt.

 We have now launched the 2012 Quintas Wealth Management EII Fund.

If you would like to discuss the Fund in further detail or to receive a prospectus please contact Jim McCarthy or Kenny Kane at 021 4641480 (email or We are also interested in hearing from companies who meet our criteria and are interested in trying to secure EII funds.

Revenue Attachments and the impact on your business

September 17, 2012

The recent publicity regarding the collapse of the transport company Target Express highlighted the impact the placing of an attachment order by Revenue can have on a business. In the case of Target it led to the collapse of the business with the loss of 400 jobs.

It took just 7 days from the date the attachment order was enforced (Friday 24th August) to the day the liquidator agreed a deal to sell the assets of the company to one of its main competitors (Friday 31st August).

Are Revenue to blame?

The debate in the news and online blamed the draconian measures employed by revenue as the main reason behind the collapse of the business. Although revenue will not discuss specific cases the publicity was so focused on them that they took the unusual step of releasing a statement defending the actions that they had taken.

Revenue stated that in general ‘”it only pursues enforcement options after specific engagement with the business. Enforcement options like liquidation, bankruptcy and attachment are only used as a last resort in cases where the debt problem is serious and intractable”.

Hopelessly Insolvent

A later quote from the liquidator that was appointed to Target noted that the company was ‘hopelessly insolvent’ which may explain why revenue took the extreme step of gaining access to the companies bank accounts and advising Targets customers to pay the amounts that they owed directly to revenue. This move unfortunately lead to staff not being paid, suppliers rushing to secure their goods/assets and customers seeking to source a new supplier given the uncertainty hanging over the company.

Unfortunately attachment orders are a common practice by revenue and they are most likely on the increase given the continued credit squeeze and the deterioration in the economy. Revenues main focus is to collect tax and there is a process in which they go about their business of gathering cash on behalf of the exchequer.

In 2010 they issued 4,228 attachments which rose to 4,463 in 2011 and which they used to collect over € 30m in taxes last year. In the 1st 7 months of 2012 revenue have issued 2,519 attachments.

I have outlined below some of the issues that need to be taken into account to avoid this action being taken against your business.

The Power of Attachment

Please click here for a detailed article on the Powers of Attachment which featured in the CPA Ireland Accountancy Plus Magazine in March 2012. The article was written by Gerry Harrahill who is the Collector General at Revenue.

REAP (Risk Evaluation, Analysis and Profiling)

This is revenues software system which it uses to profile each tax payer and business in the state. This is the main tool that revenue use when selecting businesses for a revenue audit. In most cases 5% of audits are random with the remainder being based on sectoral analysis, specific tax risks and on some of the criteria outlined further below. This has proven to be a very successful information tool for revenue and it is important to understand how this system works.


It is a basic requirement of all tax payers (individuals and companies) to ensure that they are aware of the relevant tax deadlines and ensuring that they are meeting the compliance deadlines for the relevant taxes that they are registered. With the implementation of Revenues Online Service (ROS) the interaction between the tax payer and revenue has improved considerably and it is important that both your tax agent and your business are registered for ROS. This will allow you to view your deadlines, liabilities and tax history in realtime and also allow you to receive important notifications from Revenue.


If you are falling behind in the submission of your returns or if you are struggling to pay the tax liabilities as they fall due, it is important to contact revenue to explain your situation and agree a timeframe for getting everything up to date. In the main revenue are happy to work through problems with tax payers and approaching revenue is not something that should be feared. If you are not confident to deal directly with revenue then your tax agent or accountant will be able to help in this regard.

If you have outsourced your revenue compliance it is important to ensure that you get regular updates on the discussions with revenue as ultimately the responsibility for compliance and prompt payment to revenue rests with the tax payer.


Although revenue will not negotiate on the amount of tax that is due they are very much aware that businesses are under cashflow pressure due to the current economic climate. They are willing to negotiate installment arrangements but they will not at any stage take on the role of funding a business that is having cashflow problems.

There is a formal process called a Phased Payment Arrangement form that needs to be completed and submitted with some financial information to support the installment proposal. It is extremely important that you do not make a payment committment that you will not be able to repay on time over the agreed period. It is important to complete a full cashflow review of your business for a minimum of 12 months as one of the main conditions of an arrangement is that all future returns are submitted on time and paid in full as they fall due.

Review and Update

It is important to review your revenue position on a monthly basis to ensure that there are sufficient funds in place to meet the businesses short-term commitments. It would be advisable to set up separate tax bank accounts to provide for future tax liabilities i.e. Vat, Paye/Prsi, Income tax or Corporation tax.

It may also be advisable to avail of revenues monthly direct debit system which will reduce the frequency of Vat and Paye/Prsi returns to one per annum and which if used properly will allow the business to manage its cashflow more effectively. If you are using the direct debit payment scheme it is important to review the actual liability to the monthly payment being made to ensure that no large liability or refund builds up during the year.

Revenue Correspondence & Attachment Orders

Do not ignore correspondence from revenue as a lack of communication or a delayed response from a tax payer to a demand or warning letter can have dire consequences for the business. In the case of a demand letter revenue give a 7 day notice of actions that they will take that are in the main irreversible once they are set in motion.

In the case of an attachment order revenue have special powers under tax law that does not require them to get a court order to freeze a bank account and/or to contact a companies customers to demand direct payment of the liabilities due. The attachment order remains in place until such time as the full liability has been paid.

As can be seen in the case of Target this can have a detrimental effect on a business’s reputation and in some cases it can be the final straw for a company that has been under cashflow pressure for some time.

Cold Audit Overview

It maybe advisable to have someone complete a ‘cold audit overview’ of where your business stands today and to complete a statement of the assets and liabilities of the company. This review should be able to project problems that may come down the road if the business was to experience some short-term cashflow problems due to a fall in income for a couple of months or for some other unforeseen event.

This would allow the business owner to approach each of their creditors (banks, revenue and key suppliers) to set out a plan that will hopefully head off any problems before they arise. If you feel that you have lost  control on your finances and you are unsure  how much you owe to revenue I would suggest that you complete this review as soon as possible to avoid your business running into trouble which it may not have sufficient funding in place to survive. As with all negotiations it is easier to have these discussions from a position of strength rather than as a last resort when it maybe too late.

It’s good to talk

Having dealt with revenue on numerous occasions over the years I have found that in the main they are approachable, reasonable and willing to help out within the parameters that the tax legislation allows. The problems arise where they feel they are being ignored or where they become concerned that there is the possibility that they will not be paid tax that the business is effectively collecting on behalf of the government.

Given the current pressures on the exchequer and the current circa € 15bn shortfall in tax receipts versus expenditure it is almost certain that revenue will chase down anyone they feel will be a threat to their collection of taxes.

If I had one last piece of advice it would be to treat revenue like you would any other creditor and try to have open and honest communication with them at all times.


Mark Ryan

Mark is a Director at Quintas

The views expressed in this article are not reflective of the views or opinions held by Quintas. The material contained herein includes facts, opinions and recommendations which we neither guarantee the accuracy, completeness or timeliness of, nor do we endorse. We do not accept any liability for any act, or decision not to act, use, misuse or distribution resulting from use of this material”.

Credit Guarantee Scheme – is this the only way an SME will get bank finance?

August 29, 2012

When announcing the Credit Guarantee scheme in April 2012 The Minister for Jobs Enterprise & Innovation said ‘ the scheme aims to provide much-needed credit to job-creating SMEs who currently struggle to get finance from the banks’. As anyone involved in business and especially the SME sector knows the lack of finance and the tightening of bank working capital in the last number of years has had a detrimental impact on our economy and the credit squeeze continues to worsen.

The number of viable businesses since 2008 that could have survived if they had been given the opportunity to work through their financial difficulties is a testament of how the implosion in the banking sector and the almost complete shutdown of the financial system has only assisted in pushing businesses and our economy over the edge rather than support them as we had been led to believe when the various banks were bailed out by the Irish state.

A recent report by the Irish Central bank has confirmed what most of us already knew about the levels of lending in the banking sector. The report states that Ireland has the second lowest approval level for small business loan applications in the euro zone (only Greece are worse) and that Irish loan applicants are twice as likely to have a loan application refused than anywhere else in Europe.

The government to their credit have finally reacted to the credit crunch and hopefully this new scheme will assist the SME sector to recover and expand.

If you wish to read the full Credit Guarantee Scheme Act please click here

The aim of the scheme is to provide € 150m in funding per annum over 3 years for startups and the SME sector. The scheme will provide loan guarantees to SMEs applying for finance with financial institutions. The minister has yet to announce the finer details of how the scheme will operate and what financial institutions will be involved.

Some of the key details of the scheme are as follows:

SME definition

The definition will be in line with the criteria set out by the European Commission. A business must have less than  250 employees, no greater than € 50m in annual income or an annual balance sheet value of less than € 43m,

Guarantee Value and the costs

The scheme will guarantee 75% of the value of the loan, which will provide a level of insurance for the banks when making a lending decision. There will be a 2% annual premium on the outstanding balance that must be paid to the minister each year until the loan has been repaid. This will obviously be an extra charge to the borrower on top of the cost of funds charged by the bank.  This premium can be paid on an annual or on an instalment basis.


The aim of the scheme is to create employment and stimulate the economy by making additional credit available to ‘commercially viable’ businesses that are struggling to source finance in the current climate. It is important to note that the lending criteria will be as exhaustive and ruthless as the existing criteria being used by banks but there will be an incentive to lend to viable businesses as some of the risk is being borne by the government.

Business Plans

It is important to note that there is no guarantee that an applicant will be successful in their application as the normal lending terms and conditions will apply.

As with any banking application it is essential that a full critical risk analysis is completed of the business well in advance of making the application. Again the business must take into account the additional annual charge of 2% by the government when completing its projections.

When preparing the business plan it is essential to work out for the bank and the government how this loan will be repaid. For startups that intend to apply for the scheme their business plan must be as detailed and well prepared as regards the non financials aspects of the business (marketing, product analysis, competitors, growth strategy,management team etc) as well as the important financial projections.

Scheme Operator

Capita Asset Services are the administrators of the scheme. They are currently in discussions with the various banks to work out the manner in which the scheme will be operated. It is expected that the scheme will be in place by the end of September 2012 but this start date still has yet to be confirmed. If you are considering making an application under the scheme our advice would be to start the planning for this immediately to ensure that you are ready to hit the ground running when the official scheme starts.

Borrowers will be required to maintain records, books of accounts and such other documentation as specified under the scheme and these books, records and accounts must be made available if requested.

There will be a risk involved in the scheme of borrowers defaulting but the structure and administration of the scheme should hopefully mitigate this risk.


As we are all very much aware banks have returned to cashflow lending practices rather than property based security which makes it more important to consider and show the bank how you intend to repay their loan. The security on these loans are now being provided by Ireland Inc (up to 75%) which will give a level of comfort for the relevant bank.

Once it is up and running this scheme will hopefully protect existing jobs, enable businesses to expand thus creating new employment and in turn contribute additional revenue and reduce the Social Welfare cost to the exchequer.

For every €150m of additional lending, the scheme is expected to benefit over 1,800 businesses. The cost of the scheme per €150m of lending is €6.38m. When these benefits are taken into account, the net gain to the Exchequer is over €25m per €150m of lending.

It is estimated that SME’s make up 98% of businesses in the Irish Economy (as reported by the CSO).  This amounts to circa 200,000 businesses in Ireland employing almost 1.3 million people. Given the importance of the SME sector it is obvious that the majority will need access to some form of working capital out of the total projected fund available of € 450m over the next 3 years.

Lets hope that this scheme is successful as we need the SME sector to be successful and expand if we are to have any hope of getting growth in our economy.


Mark Ryan

Mark is a Director at Quintas

The views expressed in this article are not reflective of the views or opinions held by Quintas. The material contained herein includes facts, opinions and recommendations which we neither guarantee the accuracy, completeness or timeliness of, nor do we endorse. We do not accept any liability for any act, or decision not to act, use, misuse or distribution resulting from use of this material”.

Are you concerned about not being able to meet your mortgage repayments?

July 11, 2012

If you are, the Central Bank of Ireland’s Code of Conduct on Mortgage Arrears (“the Code”) sets out clearly a range of rules which your mortgage lender must follow when dealing with you. This Code came into effect on the 1st January 2011 and is applicable to anyone who is in arrears on their mortgage payments on their sole or main property. The Code is a reflection of the fact that Mortgage Arrears and the Handling of Mortgage Arrears is an ongoing top priority for the Central Bank of Ireland (“CBI”). Mortgages through a Credit Union are not covered by the Code.

Your lender must have procedures in place to deal with your situation and find an appropriate solution for your circumstances under the Mortgage Arrears Resolution Process (“MARP”). MARP is the process for dealing with customers in or at risk of mortgage arrears and each mortgage lender must have an information booklet that sets out its MARP which must be available on its website.

Essentially MARP is a 5 step process:

Step One        Contact your mortgage lender immediately

Step Two        Complete a Standard Financial Statement

Step Three     Assessment of your financial situation

Step Four       Seeking a resolution

Step Five        Appealing a decision

Step One        Contact your mortgage lender immediately

If you are behind with your mortgage repayments or feel you may shortly experience difficulties meeting your mortgage repayments your first step should be to contact your lender as soon as possible to discuss the situation. Discussing your mortgage repayment problems as early as possible will help in reaching a solution. Any delay in contacting your lender may result in your mortgage arrears situation becoming worse than it would have been otherwise. Your branch must have at least one specially trained person with specific responsibility for dealing with your situation who will conduct your meeting in private. Your lender must treat your case sympathetically. You have the right to nominate a third party to discuss the situation with your lender on your behalf such as MABS so long as you give your permission in writing.


How your lender must communicate with you.

If your mortgage is in arrears for 31 days, your lender must write to you of your mortgage account status within 3 business days. The letter must include the following:

  • State the date that the mortgage fell into arrears, the amount of arrears in euros and the total amount of full or partial payments missed;
  • Confirm that it is treating your case as a MARP case;
  • Highlight the importance of you cooperating with your lender during the MARP process and notify you that, if co-operation stops, the protections of the MARP no longer apply and that the lender may start legal proceedings for repossession;
  • Include a statement that fees, charges and penalty interest in relation to the arrears will apply where you do not co-operate with your lender.

It is important to note that apart from communications that your lender must give you there are limits on the number of communications your lender can make with you. The CBI is cognisant of the fact that unexpected and excessive contact from your lender can be stressful and the Code requires that such contact be proportionate and not excessive. Therefore the CBI limits the number of times your lender can contact you to 3 times in any calendar month, unless you have given prior informed consent to your lender contacting you. This includes contacts by phone, e mail, text, and letter or by calling to your home and includes missed calls or where messages are left for you.


Stage Two      Complete a Standard Financial Statement (“SFS”)

Your lender will request you to complete a Standard Financial Statement (SFS) on your current income, expenses and liabilities prior to making its decision on whether to offer you an alternative repayment arrangement. The function of this document is to gather all your financial information to assist the lender assess your financial situation. It is important that you cooperate with all requests for documentation as if you do not, you could be classified as not cooperating and a 12 month waiting period (moratorium) for commencing legal action for repossession of the property will no longer apply to you. (Please refer below to paragraph on repossession).

Stage Three     Assessment of your financial situation

Your completed SFS will be assessed by the Arrears Support Unit (ASU) who will determine whether or not to offer you an alternative repayment arrangement. Lenders will usually consider your personal circumstances, your personal debt, information you provided in the SFS, your ability to make repayments, your previous repayment history and other relevant information.

Step Four       Seeking a resolution

After assessing your situation, your lender will determine whether your mortgage should be re-scheduled and what alternative repayment arrangement is appropriate. Where you are offered an alternative repayment arrangement your lender must give you a clear explanation of the proposed arrangement and any implications for you.


Alternative repayment arrangements that your lender may consider include:

  1. Interest-only arrangement for a set period of time – the balance of the outstanding capital amount would remain unchanged for the interest-only period.
  2. Extending the mortgage term – your monthly repayments will be lower, however, you will be subject to more interest as the mortgage will be payable over a longer period of time.
  3. Capitalising the arrears and interest – you are experiencing difficulties in paying off the arrears, the lender may agree to collect them over the balance of the mortgage term.
  4. Voluntary scheme your lender has signed up to if, for example, your lender has signed up to a Deferred Interest Scheme, your lender may consider allowing you to defer paying up to 34% of the interest on your mortgage for a period of time. However, you must pay what you can afford and there is no additional interest charged on this unpaid interest during the set period.

It is important to note that interest will accrue on any arrears you owe but your lender cannot charge you additional interest just because you are in arrears.

In practice most lenders agree an alternative arrangement if you cooperate with them. However, your lender is not obliged to offer you such alternative repayment arrangements. If your lender refuses to offer you such an arrangement, the reasons for refusing to do so must be given to you in writing together with your right to appeal to the lenders Appeal Board and your lender must discuss other options with you including, for example:

  • Voluntary Surrender – this would mean that you agree with your lender that they can take full legal ownership of the property. However, you will remain liable for any amounts that you owe to your lender and which they do not recover from the sale of the property.
  • Trading Down – this would mean selling your property and buying a cheaper one which would result in more affordable monthly mortgage repayments. You need to be sure that that you have sufficient funds from the sale to buy another property, after paying off the current mortgage and taking into account stamp duty, solicitor’s fees, auctioneers fees etc.
  • Voluntary Sale – this means that you will only receive monies in excess to the amount owed to your lender as your lender is entitled to recover the mortgage balance and legitimate charges from the sale.

If, for example, your mortgage is €300,000 and your house is sold for €250,000, you will still owe your lender €50,000.


Where an alternative repayment arrangement has not been put in place, or if you do not pay some or all of three mortgage payments, your lender must notify you in writing of the following:

  • Potential for legal proceedings for repossession of the property together with an estimate of the costs to you of such proceedings;
  • Importance of taking independent advice;
  • Regardless of how the property is reposed and disposed of, that you will remain liable for the outstanding debt, including accrued interest, charges, legals and other related costs, where applicable.

Remember, if you do not enter the arrangement offered and if you do appeal your lender’s decision, the time taken by your lender’s Appeals Board to consider your appeal is not included in the 12-month waiting period. However, if you decide not to appeal the 12-month waiting period on the lender taking legal action against you no longer applies.

Step Five        Appealing a decision

Your lender will have an internal Appeals Board where you can appeal on any of the following grounds:

  • Your lenders’ decision on your case; and/or
  • How your lender treated you under the MARP process; and/or
  • Whether you feel your lender has not complied with any of the requirements under the Code.

You will have 20 business days following the lender’s decision to submit an appeal to your lender’s Appeals Board.  If you are unhappy with the outcome of the appeal you can make a complaint to the Financial Services Ombudsman, however, you must exhaust your lenders complaints process first.



Lenders can repossess homes after exhausting every way possible to solve the problem. Repossessions are not altogether common, for example, there are around 800,000 mortgages in Ireland and in 2010 only 300 homes were repossessed by court order. Your lender cannot apply to the courts to commence legal action for repossession of your property until every reasonable effort has been made to agree an alternative arrangement with you. Where you are co-operating with your lender, the lender must wait at least 12 months from the date you are classified by your lender as being under MARP (i.e. day 31 from when arrears first arose), before applying to the courts to start legal action for repossession.


Important points to be aware of

  1. Cooperate with your lender in relation to your mortgage arrears as if you do not you are not protected by the 12 month waiting period under MARP before your lender can commence legal action for repossession of your primary residence.
  2. Your lender cannot contact you more than 3 times per month in relation to your mortgage payments unless you have given your lender prior permission.
  3. If you agree an alternative repayment arrangement with your lender and continue to meet that alternative arrangement, your lender cannot start legal proceedings against you and your lender cannot impose any charges on your mortgage account relating to your arrears.
  4. Your lender cannot move you from an existing tracker mortgage to another mortgage type as part of an alternative arrangement offered to you or just because you are in arrears.
  5. Your lender can only consider repossession after they have considered carefully every other way of solving your problem and have made every reasonable effort to agree an alternative repayment arrangement with you.
  6. If your property is repossessed and the proceeds of the sale do not redeem the mortgage in full, you will remain liable for any outstanding debt, including any accrued interest, charges, legal, selling and other related costs if this is the case.
  7. Your credit rating may be affected if you have an overdue balance on your mortgage account or if your home has been repossessed.

Useful contacts:



Joan Bourke

Joan is Legal and Compliance Officer at Quintas Wealth Management


The views expressed in this article  are not reflective of the views or opinions held by Quintas. The material contained herein includes facts, opinions and recommendations which we neither guarantee the accuracy, completeness or timeliness of, nor do we endorse.  We do not accept any liability for any act, or decision not to act, use, misuse or distribution resulting from use of this material”.


VAT on Property – Almost 4 years on has much changed?

May 2, 2012

The new VAT on Property system was introduced on 1 July 2008 to simplify the complex area of VAT on Property which had become unwieldy and to some extent nearly unmanageable. It was clear from the outset that it would take time for all parties involved to come to terms with the new system.

Although we are nearly 4 years into the new system, the whole property market has changed dramatically and the level of transactions has been low.

In this article, we will deal with the system and approach to dealing with VAT on Property transactions, the Capital Goods Scheme, the transitional rules and finally some items to be considered.

The System & Approach The VAT on Property rules can be divided in to four distinct categories;

o Sale of Property

o Letting of Property

o Capital Goods Scheme (CGS)

o Transitional Rules

When dealing with VAT on Property, the following approach is useful:

1. Determine the type of transaction – Sale; Letting; Assignment/Surrender;

2. Standard / Transitional rules;

3. Review Capital Goods Scheme considerations;

4. Consider Anti Avoidance provisions.

In order to understand the operation of the new system, it is imperative that you firstly understand the CGS.

Capital Goods Scheme (CGS)  – The CGS is a system for ensuring that the VAT deductibility for a property reflects the use to which the property is put over the VAT-life (or adjustment period) of the property. The adjustment period is 20 years in the case of a new development, or 10 years in the case of a refurbishment.

The CGS allows the taxpayer to initially recover VAT based on an estimate of how the taxpayer expects to use the property with subsequent adjustments based on the actual usage. In year 1, the full VAT is adjusted, while in subsequent intervals the adjustment is 1/20 other than in the case of a big swing adjustment, which only arises if there is greater than 50% change in usage.

We have outlined below the steps involved in the CGS:

CGS Step Plan

Step 1 Recover the VAT upfront – Based on how the taxpayer intends to use the property

Step 2 Year 1 Adjustment – 12 months after the property acquired/developed – Adjustment on the entire VAT amount based on actual Year 1 usage

Step 3 Annual Adjustments – Annual adjustments are at the end of the accounting period and not related to purchase date – The base year is Year 1 and each interval adjustment is 1/20

Step 4 Property Sold/Let – When a property is sold/let within the adjustment period, a CGS adjustment may be required.

Example ABC Limited acquired a new building on 1 May 2010, on which it was charged €200,000 VAT. At the time ABC Limited estimated that the building would be used for 70% Vatable activities and therefore recovered €140,000 VAT in its’ May/June VAT return. At the end of the first year, it transpired that the property was actually used for 60% Vatable activities and therefore an adjustment was required. As it was the first interval adjustment, the adjustment was based on the entire VAT amount. The actual VAT that should have been recovered was €120,000 (60%) and therefore €20,000 has to be returned in its May/June 2011 VAT return. For each subsequent interval, the adjustment will occur at the end of the accounting period and only be based on that interval (e.g. 1/20). ABC Limited year end is 31 December and therefore the second interval is 1 May to 31 December 2011. If it transpired that the property was used for 70% Vatable activities in the interval period the adjustment would be €1,000 [(€140,000 – €120,000)/20)].

The key point is that the benchmark for all future interval adjustments is the VAT recovered based on Year 1 actual usage and not the original VAT recovered.

In Practice – Where a taxpayer has full recoverability throughout the adjustment period, then there is no adjustment required. If the property is sold during the adjustment period, then an adjustment will be required where the sale of the property is exempt and the option to tax has not been exercised.

Where a taxpayer has partial VAT recoverability, it is necessary to review at the end of each interval and an adjustment will be required if there is a change in the Vatable usage of the property.

Sale/Lettings of Property – This area has been comprehensively dealt with in the two articles by Vincent McCullagh in 2009. The sale of a property is exempt unless it is a ‘new’ property when VAT is chargeable. The letting of property is also exempt. 

 Option to Tax – The new rules introduce the ability to ‘opt to tax’ certain exempt sales/lettings of property. This reflects the fact that a large proportion of property transaction will be exempt and is designed to counteract any potential claw-back of VAT (under the CGS) as a result of making an exempt supply. In order to opt to tax a transaction, it must be between taxpayers in the course of their businesses and it must be exercised in writing. It is not possible to opt to tax residential lettings. Also, it is not possible to opt to tax a letting to ‘connected’ tenants or where the landlord and occupant are ‘connected’ unless the tenant/occupant is entitled to recover at least 90% of the VAT charged on the rent.

In Practice – The decision whether to opt to tax the sale/letting of a property is critical and requires careful consideration. Where there is a potential CGS adjustment for the Vendor, the Vendor will wish to exercise the option; however the purchaser/tenant needs to give this careful consideration. Even where the purchaser has full VAT recovery, by agreeing to opt to tax, the 20 year CGS begins again and future potential CGS adjustment issues would then rest with the purchaser. It is not possible to backdate an option to tax and therefore it is imperative that due consideration is given to this decision.

Transitional Rules – The transitional rules will apply to a property which was acquired or developed by a taxable person before 1 July 2008 and which that person still owns on 1 July 2008. It is important to point out that the property will remain within the scope of the transitional rules until it is sold.

In Practice – The transitional rules will in the main apply to assignments and surrenders of Legacy Leases, which are leasehold interests created by a taxable person before 1 July 2008, for a period of 10 years or more and the tenant was entitled to recover VAT. Where the tenant was entitled to recover any VAT on acquiring the lease or developing the property, then the assignment/surrender is subject to VAT, based on a formula (T x N/Y). Where the tenant was not entitled to recover VAT, then the assignment/surrender is exempt with an option to tax.

In relation to lettings, the transitional rules only apply where the landlord had an entitlement to recover VAT. The transitional rules are very similar to the new rules in that the letting is exempt with an option to tax.

The key differences between the standard and transitional rules are if the landlord does not opt to tax the letting, then there is a deductibility adjustment and not a CGS adjustment (while you might think that these are the same the amount will not always be the same) and opting to tax a transitional letting does not give rise to any additional VAT recovery entitlement. The transitional rules only apply to the sale of a property where the property was acquired before 1 July 2008, there was no development since this date and there was no entitlement to recover VAT. The transitional rules provide the Vendor with the option to tax the sale, which could give rise to a VAT reclaim under the CGS.

Items to be considered – The new VAT on property system was never going to be straightforward and under each of the categories, there are specific intricacies and anti-avoidance provisions that need to be considered.

Below is a brief listing of the items that should be considered under the relevant headings.

VAT on Sales

– Transaction Exempt / Taxable (New Property)

– Development

– Exempt

o Undeveloped Land

o Old Property/Building – Completed (>5 years)

o Used Second Hand Property/Building – Occupied (>2 years)

– Option to Tax

– Taxable

o New Property (i.e. not within the exempt categories)

o Undeveloped Land connected with Development

o Partially Completed

o Sale by a Property Developer

VAT on Leases

– Exempt

– Residential / Commercial

– Option to Tax

-Non Residential

– Connected Persons

– Term of Lease no longer relevant for VAT Capital Goods Scheme (CGS)

– CGS only applicable where charged VAT and in business

– Initial Interval and Subsequent Annual Interval adjustments

– Adjustment only arises where VAT recovery % changes

– Big Swing (>50% change in usage)

– Maintain CGS Records

– Development by Tenant

– subsequent assignment/surrender

– Impact on Capital Allowances / Compensation Payments (TB 03-2010)

Law Society Pre Contract VAT Enquiries

This document attempts to cover all eventualities and can appear cumbersome and difficult to understand for those not dealing with them often. However, the document is split into distinct sections and only the relevant section needs to be completed.


Even though, the new system has been with us almost four year on, the system is still very much in its infancy given the level of property transactions that have taken place to date.

It is vital that all parties involved in property transactions understand that the fundamental issue is the decision on whether to exercise the option to tax. The decision on whether to exercise the option to tax is totally dependent on the CGS.

Although most practitioners are quietly satisfied that the old system is no longer with us given its’ complexities (EVT, etc), many are still getting to grips with the new system and steer away from it. As the new system still has many definitions and peculiarities, it is likely to remain a complex topic where the transaction does not fall within the straightforward rules.

To date it would appear that the new system is preferable to the old but time will tell whether new provisions will be introduced which could further complicate matters.


Sean McSweeney

Sean is Tax Director at Quintas.

The views expressed in this article  are not reflective of the views or opinions held by Quintas. The material contained herein includes facts, opinions and recommendations which we neither guarantee the accuracy, completeness or timeliness of, nor do we endorse.  We do not accept any liability for any act, or decision not to act, use, misuse or distribution resulting from use of this material”.

New Year Resolutions – have you set them for your business for 2012?

January 4, 2012

‘A goal without a plan is just a wish’ – Antoine de Saint-Exupery

As we face into the first couple of days of 2012 I am drawn back to the start of the year when I would have set my own personal and business goals and also assisted some of our clients in setting out their financial plans for 2011.

As we reflect on the year gone by we can sometimes get downhearted about what was not done rather than focus on what was achieved. In some cases there maybe areas where we will have to go back to the drawing board completely.

I have outlined below a few tips and suggestions that may help you to set your new year’s resolutions and business goals for 2012:

 Visualise & Record – setting goals will only be effective if you have a clear vision of what you want to achieve. Write them down and split between short term (6-12 months) to medium term (3-5 years),

 Review & Resolve – review the goals set out on a weekly or monthly basis with a trusted friend or advisor who you can discuss and resolve any problems that you maybe having,

 Business Plan – prepare financial budgets/projections taking into account the last 3 years and make sure to be realistic by comparing them to your industry/sector,

 Cashflows & KPI’s – set up a KPI reporting system that ensures that you can review the performance of the business on a weekly/monthly basis and to ensure that you can measure how you are performing compared to the budgets/cash flows,

 Growth – prepare a marketing plan and growth strategy where you outline how you plan to grow the business and increase turnover next year,

 Bonus Schemes – if you need to make wage adjustments consider putting a performance based bonus scheme in place so that you can motivate your staff and ensure that they can share in the growth of the business,

 Social Media – understand social media and work out where it can benefit your business be it on facebook, LinkedIn twitter etc,

 Website – ensure that this is up to date as the majority of customers do their research on line before they consider what company to buy from,

 Downtime – take some time every month to work on (rather than in) your business.

 Get out there – become a member of a networking group. It is a great way to meet new business contacts, promote your business and gain access to potential customers.

Finally, it is essential that you reward yourself for your successes and commit to work on the areas that have not yet been achieved.

The best of luck in your goal setting and for the year ahead.


Mark Ryan

Mark is a Director at Quintas and heads up the Business Centre.

Quintas Business Centre provide outsourced ‘Financial Management, Accounting, Bookkeeping, Vat, RCT  and Payroll Services’.

The views expressed in this article  is not reflective of the views or opinions held by Quintas. The material contained herein includes facts, opinions and recommendations which we neither guarantee the accuracy, completeness or timeliness of, nor do we endorse.  We do not accept any liability for any act, or decision not to act, use, misuse or distribution resulting from use of this material”.


Protect your Brand from Internal Sabotage

December 7, 2011

 Many organisations invest significant resources in their corporate brand, even in recession it’s important to continue this investment, to maintain the  corporate message and awareness. However it never ceases to amaze me how little consideration is given to the extent to which this investment is weakened and diluted by the way in which the individuals within the organisation behave and conduct themselves. 

 At the end of the day people do business with people and it’s those people within your organisation that provide the glue to hold your brand together.  Negative behavior can be very damaging for your corporate brand regardless of the amount of your investment in that brand, conversely those same people can also reinforce and strengthen your brand so that it truly stands out through their actions and behavior. To put it another way the Personal Brand must be aligned and on message with the Corporate Brand. 

Consider the impression created for a client or potential client who on arrival in your office is ignored for 30 seconds while a tired apathetic member of your staff finishes a chat about their weekend with a colleague! Apart from getting irate their subconscious takes over, is this person a reflection of the organisations standards, does the company pay any attention and care for it’s staff behavior, does this lack of care and attention extend to my business affairs with the company? Negative messaging does untold damage to your corporate brand and reputation rendering the significant investment of resources in that brand wasteful. 

Research in this area makes fascinating reading

* It takes 7 seconds to create a first impression.

* It can take as much as 21 further experiences to alter that first impression.

* First impressions are strongly influenced by factors such as dress, handshake, body language, eye contact, your voice message on your voicemail

* The best assessment of your personal brand is to find out what people say about you behind your back! 

You cannot afford to ignore the impact that people including those at the highest level in your organisation have on your brand. Yet how often do you measure the impact your people have on your corporate brand investment?  Businesses need to create a synergy between corporate and personal brands.  They need to clarify what the corporate brand values are and as importantly how an individual can personally interpret and reinforce them.

Take on board the need to address the personal brand of individuals in your organisation and encourage them to reinforce your organisations corporate messages and be proud to work for your company. This process will significantly increase the value of your investment in the corporate brand.

by Fachna O’Mahony

Fachtna O’Mahony is a Partner at Quintas 

The views expressed in this article  is not reflective of the views or opinions held by Quintas. The material contained herein includes facts, opinions and recommendations which we neither guarantee the accuracy, completeness or timeliness of, nor do we endorse.  We do not accept any liability for any act, or decision not to act, use, misuse or distribution resulting from use of this material”.