Welcome to our 2013 Winter Newsletter. As we plan and plot our course for another year there seems to be a cautious optimism that in general the worst may be over for the economy and by extension for our businesses and individual citizens. Naturally not everyone is feeling these sentiments and the future holds many difficulties of varying degrees for us all however there is much to be positive about and it does us no harm at all to accentuate the positives and continue to generate some confidence.

• The 9^th Troika Bailout Review is imminent, thus far all has being going according to plan and if that continues this time next year we should be after exiting the programme and be back in charge of our own finances. Very positive indeed provided that there is fiscal discipline.
• The reorganisation of our financial and banking structures are in the process of being completed leaving us with a far more robust banking system. This process has been painfully slow and has frustrated most businesses, however anecdotal evidence on the ground suggests a more pragmatic and realistic approach is being taken by most banks at present.
• Economic Data is more positive albeit marginally so. GDP is showing growth, GNP is still showing contraction but if our export market maintains the GDP growth, then GNP should swing positive in the next quarter or so.
• Some retail sectors had a good Christmas which is a sign of increasing confidence in the domestic economy which will hopefully be sustained throughout 2013.
• Unemployment figures are falling and while this can be attributed to our “natural release valve” emigration there have been significant job announcements in the latter part of 2012.

There are forces at work in the current tax policy environment that will alter the tax landscape as we know it. Effective planning will demand that you develop your own personal view of our economy and the markets, the future of taxes and tax rates that you may experience, and the Government priorities that may influence your own retirement needs.

Obviously, the current shift in tax policy and the economic environment has significantly altered tax planning advice. What was suitable in 2007 may not be relevant in 2013. It is imperative that up to date tax planning is undertaken as despite the increase in tax rates and reduction in incentives and reliefs, there is significant potential for tax savings.

Future Uncertainty

In the face of such uncertainty, it is tempting to do nothing on the grounds that it is too hard to know what course of action to follow. Of course, in tax and wealth planning, doing nothing is still a decision and can be a bad one.

Although the potentially dramatic level of the changes we see ahead creates uncertainty for individual tax and wealth planning, it also can create opportunity for those who address the uncertainty head on.

We must have learned from our experience by now that all the simplest of business principles that have been used by the best companies around the world can and should be used by us all to some degree in our own businesses regardless of our size and market.

The best companies use a down to earth and pragmatic program to commit to a standard of excellence founded around three elements:

1. Disciplined People – getting the right people into the business and then keeping them focused on excellence.
2. Disciplined Thought – being brutally honest about the facts facing your business and avoiding the temptation to get side tracked on non-core ideas.
3. Disciplined Action – Realising what is important to achieve for your company to succeed.

It is accepted that there is a certain amount of Black Economy activity in every country but it is during a recession that it is at its highest.

A recent report (August 2012) compiled by EPS Consulting for Retail Ireland estimated that the Black Economy was costing the Exchequer c. €1 billion per annum in lost revenues and taxes. A press release by ISME in November 2009 estimated that the Black Economy was worth €461m per week and that it was costing the exchequer €4.8 billion per annum in lost revenues.

Since mid 2008 successive Governments have taken over €28 billion out of the Irish economy in tax rises and spending cuts, the equivalent of well over 15% of national output. The most recent budget removed €3.5 billion. The Governments aim in doing this is to leave the EU/IMF austerity programme and to reduce the budget deficit to below 3% of GDP by 2015, which currently stands at 8.2%, one of the highest in the EU.

Arising from a ruling on a case brought before the Court of Justice of the EU, since December 21^st insurance companies are no longer allowed to quote you a different price for your insurance based on your gender. Unisex premiums and benefits are provided from this date.

The types of policies affected are all insurance policies that previously used a customer’s gender when calculating a premium or benefit. These policies are life insurance, serious illness cover, income protection, annuities & motor insurance.

Below I have given a brief synopsis on how you might be affected from the change in any of these insurance policies and the importance of reviewing your existing policies.