Brian Keegan: Businesses need to be allowed imaginative rule bending in the Covid-19 crisis

It is startling the extent to which the coronavirus pandemic has changed the ground rules for business, writes Brian Keegan.

Corey Murphy, Konrad Lasnadk and Robert Keating, with a the first delivery of hand sanitiser gel to Mervue Laboratories in Watergrasshill, Co Cork Picture: David Keane
Corey Murphy, Konrad Lasnadk and Robert Keating, with a the first delivery of hand sanitiser gel to Mervue Laboratories in Watergrasshill, Co Cork Picture: David Keane

Regulatory matters pale into insignificance when compared to the drop in demand for goods and services, the disruption to supply chains, and the layoff of hundreds of thousands of workers across the country.

Nevertheless, the usual obligations which apply to business continue to operate, pandemic or not.

Just as the HSE and the Department of Employment Affairs and Social Protection have been reacting to the new reality, so too have financial and information regulators.

The relaxation of rules on regulatory compliance is partly being driven by a recognition that businesses have more pressing issues to deal with.

There may also be a pragmatic recognition on the part of the authorities that they may not have the staff themselves either to process or enforce declarations, payments and returns.

Several Government agencies have closed their offices and planned for their own staff to work from home.

Some of the rule relaxations for businesses came from the Companies Registration Office (CRO), which requires annual filing of accounts from companies, along with supplementary information to do with their directors, ownership and the like.

Returns that are due now will be deemed to be on time if filed by June 30, and the CRO says this date might be extended further if necessary.

Also, in a week with two major payments of Vat and PAYE due from businesses, Revenue says small businesses (those with a turnover of less than €3m) will not be charged interest if the payment is made late.

Larger businesses are being encouraged to get in touch with their tax office if they are running into trouble making payments.

Even if there are payment difficulties, businesses should continue to keep their PAYE systems and Vat returns up to date.

Both agencies are to be commended for their pragmatic approach.

Their actions should prompt other government regulators in similar spheres such as the Data Protection Commissioner, the Irish Accounting and Auditing Standards Authority, and the CSO to formally announce a relaxation of some of their compliance requirements on businesses.

It is not acceptable, as some agencies have suggested, that their governing legislation does not allow them to make exceptions.

The charging of interest on late payment of tax, for example, is a statutory requirement, yet it seems possible to have it set aside, albeit in limited circumstances.

We have also seen in recent days just how quickly the Oireachtas can act to put new rules in place to address a crisis, even when those rules, in normal times, would be regarded as severely impinging on civil liberties.

But these are not normal times, and jurisdictions across the world are moving decisively to help out businesses in trouble.

In Northern Ireland, all businesses will pay zero commercial rates for the next three months.

Analysis provided by international accounting firm KPMG suggests over 30 countries have, in recent weeks, provided filing reliefs and extensions to statutory tax deadlines and payments.

These range from anything from deferring major tax payments due to suspending the need to pay car tax.

The US, among many other measures, is suspending excise duty on alcohol used for hand sanitisers.

Now is the time for imaginative approaches like these.

There is no point in Government enforcing charges which cannot be paid, or deadlines which cannot be met.

We need to see more flexibility from Irish business regulators in the coming days. Beyond that, it might be too late.

- Brian Keegan is director of public policy at Chartered Accountants Ireland

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