Accountancy MONTH David O'Reilly
23 Apr 2021
David O’Reilly, Director of Tax with Fenero is in conversation with Jean O’Donovan, Director with Brightwater.
JOD: So I’m here today with David O’Reilly, Director of Tax and owner of Fenero Group. David, thank you so much for joining me. You’re going to give us an overview of your career to date and also a little bit on IR35 which has recently been implemented. So thank you very much.
DOR: Thank you very much for having me.
JOD: No problem. Let’s kick off with a little bit about yourself and looking back. What first prompted your interest in entering into an accountancy career? What prompted your interest in an accountancy career?
DOR: That’s a long time ago now. I always loved solving problems and in school when the few times I got the trial balance to balance, there was great satisfaction in that. Getting the left hand side and the right side to balance up, that was harmony for me. I was quite good at numbers in school and back then if you were good at numbers, your life was drawn out for you, you’re this, this and this career. Having been an accountant for quite a few number of years, you don’t have to be good at numbers, that’s a myth.
DOR: You don’t have to be good at numbers. Some of the best accountants I know, are terrible at numbers and their mental arithmetic is terrible. You’ve got calculators and Excel, that’s the type of skills you need to be a good accountant.
JOD: Fair enough, I wouldn’t have thought of that. You obviously went a step forward and specialised in tax. Why that? Why tax, I should say.
DOR: So I trained in a small accountancy practice and got great exposure. I’d be sitting in a room with the partner at the client meetings and we’d go through the accounts. The clients weren’t that fussed about the accounting principles. What they wanted to know was how much you’ve saved me, how much it costs. All the questions were about tax, so I’d go down and I’d try to read the citations of tax and it was difficult. I thought “I’m not having that” so I finished up in the small accountancy practice and I went to a large company in the tax department and started afresh. Because tax is real, it’s what impacts the clients’ and businesses’ back pockets so I wanted to get up to speed on that.
JOD: Very good, and did you spend a bit of time with the larger firm before you moved on?
DOR: Yes, I spent close to three years with one of the Top 10 firms purely in the tax division and it was fantastic. I was exposed to a whole different array of taxes going from VAT to corporate tax, professional services and holding tax and all the tax heads. It really showed me the importance of being able to communicate knowledge. You can have all this knowledge in your head but if you can’t communicate it in understandable, easy to understand English, then it’s useless. It really showed me the importance of communication skills for a career in both accountancy and in tax.
JOD: I think that’s a really valid comment, it’s the communication of tax. If you aren’t an expert in tax, a lot of people may feel overwhelmed so it’s really important to break that down for people.
DOR: Because tax is complicated and I always say to the team, “if you’re not able to explain it simply, then you don’t understand it well enough”. Be able to break it down, to explain it to people who haven’t studied tax or haven’t studied accountancy.
JOD: In 2010, you were involved in the set up of your own company. Could you tell us what Fenero do and how you spotted the gap in the market at that point? What does Fenero do and how did you spot that gap in the market for your services?
DOR: To be fair, my business colleague and then fiancée, Sinead, actually set up Fenero. At some stage, she then made the best recruitment decision ever to head hunt me. I don’t say that, a lot of people say that.
JOD: I might have to qualify that.
DOR: Fenero in the early days, we specialised in helping start-ups get off the ground. That was really good because you’d be dealing with all sorts of characters, they’d come in with weird and wonderful ideas. We had this wealth of knowledge. Sinead is also an accountant and a financial advisor so we had two senior people and we were really able to help these individuals which gave us a lot of satisfaction. Sinead, to be fair, spotted a gap. There was something going on in the contingent gig economy and we started an umbrella company services which looked after professional service contractors. In 2010, we had 2 contractors at the end of that year and it grew. Both the accountancy practice and our services for looking after professional contractors grew quite well and we pivoted four years later to focus solely on professional services contractors.
JOD: Fantastic, and obviously you had your celebrations of your 10 years’ anniversary in 2020 and you won Tax Team of the Year at the Accountancy Awards. That must have been a fantastic achievement for you.
DOR: Unbelievable, we pride ourselves on our ability to explain things simply, and to really help, to be able to see the real picture and help our clients so to get to that acknowledgement in front of our peers was amazing. It was a great feeling. We also won the Practice of the Year as well the previous year so we’re doing okay on awards.
JOD: Bringing it back to the contracting side of things, David, obviously in 2020 with the pandemic, the majority of businesses pivoted with everyone starting to work from home. So maybe this was an opportunity for employers in relation to the talent that they could acquire, particularly contractors because they might not have to be based in the same county, locality or even in the same country. How have you seen professional contracting be impacted by the pandemic? What impact did the pandemic have on professional contracting?
DOR: So we had a little bit of exposure to this issue pre-pandemic. Ireland has a lot of great companies here and they’d be constantly looking for talent. They’d be bringing talent in from all around the world but pre-pandemic, they had to physically come to Ireland. Which is a problem from a rent perspective, we have high income tax as well, great corporate tax but high income tax. So that was a challenge, getting these really talented people across to Ireland. Post pandemic or during the pandemic, remote working is accepted. So one good thing to come out of the pandemic is the acceleration of the acceptance of remote working. That was fantastic so people don’t physically have to go to the location. They can do the work from home or they can do the work from Argentina, Brazil, all around the world. So we’re seeing companies tap into that talent pool and it’s a massive talent pool. There is a caveat to that in that tax and employment legislation hasn’t caught up to that yet to the way companies can hire talent. It will take a few years and the double taxation agreements will have to be looked at but from a company’s perspective, there’s a massive talent pool and it’s the world. It’s great to see.
JOD: It’s nice to be talking about a benefit of the pandemic so that’s absolutely good to see.
JOD: So IR35 has recently been implemented. Could you give me a brief overview of what exactly it is and how it’s affecting both contractors and employers? What is IR35 and how does that affect contractors and employers?
DOR: IR35 has been causing some waves and especially in the UK. It’s complex, it’s ambiguous but in simple terms, it’s anti-avoidance legislation. What it does is look at what the relationship is between the individual and the company. Is that an employee / employer or is it individual contractor /client. It looks at that relationship and wants to tax that individual based on that relationship. If they’re an employee, payroll taxes get applied to the contract income. If they’re an independent contractor, well then, the individual can pay expense, can pay dividends out on that so it really looks at that relationship. That’s the key to it. And it taxes that person accordingly.
JOD: Ok, perfect. So it’s definitely something that people need to be mindful of at this point.
DOR: Especially for clients. From the 6th April, there were some changes to the rules. The responsibility for deciding if the individual is an employee or a contractor passes to the client so for the client or recruitment businesses, they really need to make sure that if they’re taking on a contractor and they’re using their UK personal service company, that they have to asses at the start, if this individual is really a contractor or an employee. And it’s only for contractors using their UK limited companies. If it’s an Irish individual and an Irish company, then it doesn’t apply.
JOD: Great, thanks so much for that.
JOD: Bringing it back to the tax side of things, I would talk very much about the changing role of the accountant, moving away from that numbers focused persona to the whole person, what would you say are the softer skills that a tax accountant would need nowadays? What are the softer skills that a tax accountant should have?
DOR: It’s a great question. Listening ears. You’ve got to put your listening ears on. You have 2 ears and 1 mouth and use them in that proportion is my advice. It’s true. Really listen to what the client is saying, listen to what the client is not saying. That and the ability to take on a holistic approach to problem solving. You need to see everything. You’re going to have all this knowledge in your head from a tax perspective but sometimes, the answers or solution isn’t the tax solution, you have to take the family, the personal, what’s the future so be able to see the whole problem and taking a step back. Take your emotions out of it, take their emotions out of it, because sometimes you’re dealing with emotional situations. Be able to see the whole picture and be able to apply all that knowledge that you’re building up to the problem.
JOD: So listen and be objective.
DOR: Yes! Nice way to summarise.
JOD: Very good!
JOD: Finally, I’d just like to ask you, what would you say to a graduate considering a career in tax or accounting? You have both qualifications yourself, David, you’ve been very successful. What advice would you give to someone coming straight out of college? What do they need to do? What’s the best advice you could offer a graduate considering a career in accountancy or tax?
DOR: Do it! Bite the bullet and do it. I’ve always said if you can help people with their health, their wealth or their family, they’ll be eternally grateful to you. With tax, you’re helping them with their wealth. What I would recommend, don’t study to pass the exam, study to be able to apply the knowledge at a later stage in your career. Too many people study to pass the exam and that’s the bar? That’s not the bar. This knowledge that you’re going to acquire, you’d be surprised at how much it crops up in everyday conversations. Study to be able to apply the knowledge at a later stage in your career would be my top tip. The next one would be to read. So read all the Revenue e-briefs, read everything relating to tax because again you’ll build up this wealth of knowledge that you will use at a later stage. That would be my top two tips.
JOD: I think that’s great advice because it just shows that no matter what profession you do in, you have to have an interest in it. It is about that interest and getting that knowledge to apply it. Absolutely, I completely agree, I think it’s great advice. David, thank you so much. We really appreciate your insights today. Thank you for your time.
DOR: Thank you for having me.