How do you get from playing rugby for the Lions and Ireland to hunting for missing VAT invoices? Paul Wallace knows

LISTEN BACK. https://www.newstalk.com/podcasts/breakfast-business/the-business-of-vat-logic

TRANSCRIPT:

They say in sports that it's all about small margins, and that's certainly true for business, and some companies unknowingly reduce their own bottom line by failing to claim VAT that they've already paid for in inputs. The next guest played for Leinster, Ireland and the lions, but now he helps large companies find those missing expenses so that they can claim back from the taxpayer. Paul Wallace is the managing director of VAT logic. Morning Paul, good morning, Joe.

 What does VAT logic do? 

The VAT Act allows for the recovery of historical unclaimed input VAT so that's the credits that you haven't taken up, and we act as a complimentary service to finance, taxation, auditors, VAT advisory firms by carrying out a VAT review over the previous four years to find those. How do we do it? We've, over the last 20 years, established a data analytics program, which is proprietary tech called vata extract, and what that allows us to do is examine every transaction in the general ledger. So in some cases, that's many millions. We've recently done a client for over 8 million transactions for one financial year, and then any anomalies that are thrown up there, we further investigate and verify and then provide a report, so these can be claimed before you pass through the four year threshold where you can't benefit from those so these are invoices that these medium and large companies have paid out, which include VAT which they, for some reason, haven't claimed back. 

Is that right? Yeah. 

And there's a number of reasons for that. It can be both human and, you know, technical error with ERP systems with wrong settings as well. And these can be small amounts, but over four years and large numbers of transactions can build up to be quite considerable sums. And we been doing this for 20 years in originally out of South Africa, where it's a very mature market, the VAT review market, it isn't really here in Europe. And hence the opportunity for us, and why we set up in late did you get the proprietary software from them? Or did you get Yes, that was developed and all it basically can be moved into all that jurisdictions. So just a change of the parameters in our data analytics. So we've already moved into Ireland and the UK, and we'll be moving further into the European market, okay? And it goes back four years or 48 months. 

I presume it's most of these things will have been digitized, and it should be doable. How do you make your money? 

Well, we will share in the find it's a success fee basis only. So if we find zero no phone, no fee, no phone, no fee, that's exactly it. We will provide an eight week Analysis Report going through all their financial data, and we can give them a full marks tick, but as you'd imagine, with a no phone, no fee, as you say, and yeah, we will be expectant to find something, and we've had 100% success rate to date. So you have always found some small companies where we've had difficulty with, you know, getting into the ERP systems verification. ERP stands for just basically your your accounting platform with all your financials. 

Okay, so, but you will need access. You need full access to their accounts to be able to do the scan, and if you find nothing, you get paid. Nothing, correct? 

Yeah. Okay, so, so typically, what kind of amounts are you finding? Yeah, well, our business model would be for to work with companies of 50 million plus turnover. If I put a figure on it, our top, our big, biggest five clients this year, we will have found 3 million, 3 million in the value of the vast land. And they would all that all five of those would be 500 million plus turnover companies, and that would range from, it seems like a major 200,000 up to seven figure some, No, we wouldn't expect, generally, to find seven figure sums. But yes, that is the case, and we're probably maybe 222, clients might, might, might hit that, and it might be a five figure sum as well. Every you know, there's different industries, number of transactions, complexities, and within the business, the you know, the VATable supplies, how much is valuable our vat exempt are zero VAT. So it does vary from company to companies. Not as simple as, this is your turnover. This is what you find. And a lot of cases we dive in and we don't know what we're going to find. You know, is it going to be, 

Does it take weeks? Or does it take days? 

Yes, six, six to eight weeks. So basically, the usual data that's required for auditors is extracted, uploaded to a secure platform, then we run it through our vat extract data analytics that throws up anomalies, so it might whittle down maybe a million transactions down to 15,000 and then we further investigate that manually with our charter accounting team. And then at that stage, we'll provide a report, go through it with the client, and if everything is confirmed and agreed as missed, then that will be able to be used in their next vat return. 

And what about the tax man? Is there any statute of limitations? can the taxman say no, you're going too far back. Or they are they obliged to accept that?

The VAT act allows you to go back 48 months. So once it's there, we'll have all approved documentation, the invoices, etc. So we're very, very thorough that it's, it's all there and but it's not going it's not your problem. Once the tax man has his receipts and they, if they decide not to honor that that's, that's not your problem. You will have found the money as it were, yes, yeah. Well, I think that's, you know, to the company who does their own VAT returns, they will, they will have to realize and agree that it is very eligible, and it was something that was missed. And, you know, thankfully they, have that safety net of being able to go back four years and find where these errors were made. 

And how did you get from, you know, being a prop to, you know, looking for VAT in large companies,?

A South African company, funnily enough, where I played a lot of my rugby down in South Africa. And, yeah, and that's my big losses and big wins down there. So I was choose some contacts in South Africa that I got introduced to this i My background is economics. Worked in banking before I went professional in rugby, and when I retired, I've been involved in property, in the investment side, and then laterally in the debt brokerage side for commercial property. So, but this was an opportunity that was presented to me with zero competition in a market that isn't really looked after with regards to being we're in a unique position of being the only company that can go through every transaction on a success fee basis only. So, so it's an easy sell to clients really, when they look at it, and you know our results today, so 

your commission is generous as well? 

It is, yeah, we share with the clients. 

Is it cheaper to renovate an old building or knock it down?

Ballymore is one of the biggest construction companies in Britain and Ireland these days - currently building the Guinness Quarter, Sea Gardens in Bray as well as  numerous large projects in the UK including Nine Elms in London.  I spoke to Pat Phelan – the Managing Director of Ballymore Ireland about what it is being-a-major-builder-these-days - and asked him about whether there are enough builders to meet demand. But i began by asking him whether it was cheaper to knock down an old building or renovate it? 

Renovation is difficult, and there's no doubt about it. I mean, you know, if you look at where the cities need to go, even under our national planning framework, you know, the preference is to have 40% of that to be brownfield development. Brownfield development is more expensive. However, again, back to that word sustainability. There is an absolute intent from particular Dublin City Council now that, you know, building on Greenfield sites is not the way to go, certainly for the city itself and its environment. And there's an aspiration that we will bring older buildings back into use. So I think there's definitely going to be a push from the planners and even, I think, from occupiers, to bring some of the older stock back to the standards that we need for their sustainable buildings we're going to need. And to answer your question, it is, it is more expensive and to renovate, to renovate, yeah, that's going to have to be reflected in in in the rents that people pay. But if we are going to get serious about carbon, we you know, we need to do that. Capacity is a major issue, and we had someone on Newstalk breakfast yesterday who said that there aren't enough builders out there to meet the targets that we've set ourselves, especially for residential house building. Is that correct? I think currently, certainly, from ballymores perspective, there are. But again, you know the government correctly, and let's see what the new government looks like. Have set, you know, very high targets on the industry. You know, we've already probably doubled the capacity to be delivered in that delivered in the last four years. That has to double again. And you know, we will all have to work very closely with the colleges, with with our suppliers, to make sure that we do have the trades and the services that we need. And final question, what is the main blockage when it comes to building homes? Undoubtedly it is the availability of zoned and Service land. If you look at where I as the manager, director of ballymore, spend most of my time, it is trying to ensure that we have the basic raw material for our industry. And I am, you know, on record as getting worried about this. I think we have been building out the low hanging fruit over the last five years. I think Ireland and this came up in the election around the provision of infrastructure, we need to get very serious around where we're zoning our land and also how we're servicing that land.

Are the skies really blue at @BlueSky?

I spoke to Rose Wang - the COO of BlueSky in California for @newstalkfm.bsky.social. We spoke about lots of things incl the risk of being an Echo chamber and how it makes money. But i began by asking whether the post election surge had surprised even them? The Transcript is below too

https://open.spotify.com/episode/6mg8zWxBM7TGCb5OotRFTB?si=Mo2iq_J-RxyoT0CrmrGUiw

JOE: Were you surprised at the surge in memberships since Nov 6th?

ROSE: I always say that it's impossible to see the future. And so I don't think we had any predictions of what was going to happen with user growth, but I think a couple of things were true.

One, we were prepared for. a scenario of growth if that happened, because we've actually seen growth surges the last year. So it's happened in Japan, in Brazil, in the UK. And only recently are we seeing a huge growth surge in the US and Canada. And so I think that's why we're getting so much news right now, but it's something internally in the team that we've seen, dealt with and are prepared for.

Okay. And in terms of moderation, what's the difference between BlueSky and other micro blogging sites?  

We've taken a page out of reddit where reddit has given community moderator tools to users so they can go govern their own spaces better but many of those tools are manual and you have to use keywords they don't go from subreddit to subreddit and so we've taken that even a step further by giving programmatic  abilities to users to label posts that either have movie spoilers, and so you can go and label all movie spoilers across the network and hide those.

Or, if you don't want to see politics in your feed, you can choose a state where you see politics or don't, and you have that choice as a user. And what we believe is that Centralized systems have a really hard time meeting the needs of diverse communities, especially if their needs don't violate the terms of service in community guidelines.

And so we want to give those tools to users to go and govern their own spaces.
and is that referred to as a federated platform, allowing users to host their own version of Blue Sky at some stage?  



Our moderation is, we call it stackable moderation, but it's the decentralized nature of Blue Sky that allows folks to  basically build whatever we build.

And so a core principle of Blue Sky is whatever is first party, aka the company is building, any third party or any independent person or company can also build, whether that's feed or moderation service.  


JOE: Which brings on the question of how you make any money because there's no adverts in the feed that I've seen thus far

the way that we think about making money is that first we're going to launch subscriptions at the end of this year. And what's really important about subscriptions is that we will not put core features like speech behind a paywall, but we know that users want to have more ways to self express either through like custom aesthetics avatar frames, or higher resolution images.

And so Those are the subscriptions that we're going to come out with, but in the future, what a behavior that we've seen is that users are supporting each other on the app, and that's really exciting, where people who've created feeds or moderation labels and, They are getting paid through Patreon or Ko fi by other users.

And so in the future, we'll probably build a payments network where, and we'll help facilitate more payments across the network so that people can build a career and a living on the Blue Sky ecosystem. And then we'll just take a percentage of that transaction.



JOE: And will you move into video calling or audio calling?

Right now, I would say our engineers are doing our very best to keep Blue Sky app online, but where it goes the possibilities are endless, and, I just talked about third parties, first party, anyone can go build anything, and even if we don't build the audio or video App that people are looking for.

Anyone else can go build that on top of our protocol. And for example, we have a feature called starter packs where if you come into blue sky, you don't have to land into a completely chaotic global feed and you have users who've created the starter packs where there are followers they've curated for you and feeds curated.

So when you onboard onto blue sky, you land into a cozy corner with a bunch of followers. And.  What's really cool about these starter packs is that a third a lot of users are asking, Hey, can I search for these starter packs? I can't find them in the search. And we haven't made them searchable yet, but an independent developer built a directory of starter packs and then actually put them in categories like news or for sports, and you can go and follow those.

And so that's the beauty of blue sky. That's built on an open system is even if we as a company are busy doing something else, somebody else can go and build the thing that they want. And so you don't have to wait on us.

JOE: I heard somewhere that Andrew Tate was banned from joining Blue Sky. How did that work?
And also, how do you prevent Blue Sky not becoming just an echo chamber of everybody politically on the same side of the spectrum?

Blue sky. I think there's a false narrative that we are somehow catering to one group of people over another, and that's never been the point of blue sky.

We've built the infrastructure for a global conversation with the openness and tools that allow people to create their own experiences upon that infrastructure. So we're really not building any tool for any particular viewpoints, but rather letting other People create their own spaces online and part of that is enabling them to feel free to safely communicate in their spaces.

So I believe the Andrew Tate account was an impersonation account. So I'm not sure, it has not, we did not ban based on the fact that it's some person.

JOE:  Is there a chance then that far right wing voices or extreme left wing voices for whatever means might end up on the platform or is that difficult?

For us, we welcome anybody who is willing to have healthy  Dialogue online. And so for us, it's about  listening to our terms of service and community guidelines, which is governed by Aaron Roderick's, who used to be the head of election integrity at Twitter and now is the head of trust and safety at blue sky.

And in these terms of service, we had no tolerance for hate speech, no tolerance for misinformation. And so as long as users who are abiding by those rules. Transcribed  are having healthy dialogue, they're welcome to stay, but if they violate our terms of service, then like most other social apps, we ask you to leave.

What's different about BlueSky or the ecosystem is we can ask you to leave BlueSky and you can build your own app on your own server and  find your own community. So the difference here is we've kicked you out of our city, but you can go to a different city.

JOE: Finally, will you be adding an edit button?

I always say to users, what you guys want is usually what we want.

But for now an edit, but it is not on the roadmap

On the Make America. Again!

On The Make America, Again!!

Posh neighbourhood - awful roads

Most people have a sunny image of America thanks to watching films and TV series.  It usually displays wealth and sunshine.  People are usually well groomed and mostly friendly.  Americans are certainly friendly but mostly to those whose money they depend on.

4 Northsiders in the desert

I spent a week in California and Nevada recently (catching U2 in the Sphere if you must know) and was struck by the sheer cost of things and the sheer nakedness of the upselling.

‘Would you like to go for our breakfast special today - only $34?’ 

‘Would you like to upgrade your room - only $250?’

‘Would you like to go for a bigger car today Sir?’

We Europeans find the tipping culture in America pretty shocking.  People who do their job for which they are paid also expect - nay demand - that you also tip them between 17 and 25% on top of that and the local state taxes for doing that job.   This makes dining or drinking out in the US very pricey - even for those of us who are used to London and Dublin prices.  The price of a draught beer in LA is usually above $10 and wine, which is picked off the vine a mere hour or so away, usually $12 a glass.  Add in the expected tip for the strenuous task of taking the lid off the bottle and it soon reaches the equivalent of €15 for a modest quality drink.

Peggy Sue’s diner off the Freeway to Las Vegas

This makes an average meal very expensive for most people and that includes Americans who by my calculation, would need to earn $100,000 before tax to maintain a distinctly normal lifestyle in CA or NV.  BTW Rents in LA make Dublin/London look affordable.

Now I know that many people in the hospitality sector work incredibly hard and many deserve their tips. But countless numbers do not and yet get them anyway on top of their state minimum wage of $12 an hour. And it is that sense of entitlement which irks.  The fact that if you don't tip the barman for the first drink, he or she will simply not come back to you again.

Excalibur hotel in Vegas

Or take the shop in Vegas in which I wanted to buy a T-shirt as a memento of my trip.  For a piece of black material with a tiny piece of artwork on it, they wanted $50.  I picked it off the shelf, brought it to the till where it was scanned, state tax added and then the card machine swivelled around in expectation that I would tip 20% ($11) on top of that again.  I had to seek out ‘Custom’ with the small font.  

When I first came to the US in 2000, the tip was in cash and usually around 12%.  But it is now around 20%.  Where does that sense of entitlement end?  40%?  50%?  At what point do Americans themselves say enough is enough?

One of our travelling companions flew on to Nashville in Tennessee and said the price of food and drink there was appreciably lower than California.

That suggests that the borderless market is alive and well and driving down prices in the ‘Red states’ at least.  But the rents and wages are also appreciably lower.

The Warner Bros studios in LA

And it’s not just in hospitality that the constant upselling goes on.  We went on a Warner Bros studio tour ($75 per person) and the final hour of it was a wonderful museum - tainted by the fact that all the way along the organisers were trying to get you to pay for photos they had taken of you beside movie memorabilia along the way.

The Bat Bike

Meanwhile the quality of the roads in the US are rapidly deteriorating which suggests to me that money which might have gone on taxes is now going into pockets for personal aggrandisement as everyone kicks the can of public space improvement down the road.

I’m not saying i prefer the gruff directness of German department store staff or Finnish barmen ahead of faux smiles from Americans but maybe we have the right mix here in Ireland where people are friendly, motorways are smooth(ish) and no one expects a 20% tip for doing their job.

Maybe - just maybe - the grass is not always greener on the other side (of the Atlantic.

Automated on the Atlantic by Joe Lynam - Newstalk business editor

https://www.newstalk.com/podcasts/breakfast-business/autonomous-cars-in-ireland 

A stripped back Land Rover

Just as you should never judge a book by the cover, you should never judge modernity by the remoteness of the town. Shannon was created out of marshland 6 decades ago and was supposed to be a new type of Irish urban dwelling . The airport became a vital hub for transport communications and tourism but it fell out of favour in the 1990s, as all the technology companies wanted to be close to Intel and the capital city on the east coast.

Rather than managing, decline, the city, fathers and mothers reinvented Shannon and those concrete warehouses were slowly, but surely replaced with far more modern and energy-efficient buildings to attract international companies.

JLR in Shannon

Into this mix in the last five years has come Jaguar Land Rover. The British classic car-maker decided to send its brightest software engineers to Shannon to work on how the cars of the 2020s and even the 2030s should be controlled.

It is here in the Shannon free zone that Jaguar Land Rover – now owned by the Indian conglomerate Tata motors – is testing self-driving cars known as automated vehicles. It’s also here that it is quite obvious that the law and especially the insurance industry has a lot of catching up to do to meet the speed with which automated and semi autonomous vehicles are progressing. It’s probably not a stretch to say that children born from 2020 onwards may not ever need to own a car nor even a driving license if the law will allow them to get behind an autonomous vehicle and propel them from A to B.

John Cormican,General Manager of Vehicle Engineering JLR Shannon & Portland USA

The amiable Limerick born boss of JLR in Shannon - John Cormican - brings me to an all but empty yet brand new building adjacent to where most of his colleagues work in the Shannon Free Zone.

The cleaner greets us but there’s no one there milling around at the entrance because many of the staff can work their software magic in the comfort of their own kitchen.

Inside a large hall, Cormican shows me a silver cage which is called ‘a rig’.  It looks like something you'd store computer servers in but at a cost of €2m it’s roped off from the hoi polloi like me.

A stripped down Land Rover upon which new software is tested

The rig is how software which is designed in Shannon is tested on the Range & Land Rovers of the future.

Beside the rig is a gleaming Land Rover in which 2 engineers stare at laptops digesting data from the last test run.

Back in Dublin, my Newstalk colleagues commented how they had no idea that such bleeding edge technology was being piloted on the western seaboard of Europe.  And I get a sense that JLR is happy to keep its little secret under the radar.

What started off with a handful of software boffins in 2017 has mushroomed into 300+ staff dreaming up and implementing software applications which the cars can pull down from the cloud without even stopping to order a ‘skimmed oatmilk Mugachino’

I wondered whether it’s a tough ask to attract talented engineers to Shannon as opposed to more cosmopolitan parts of Europe?

“It's quite a big recruitment drive we've been on since we opened up in 2017. I wouldn't classify it as being remote,” according to John Cormican. 

“I mean, we live in the west of Ireland. It's one of the most beautiful places in the world. We're in between two major cities, Galway and Limerick. 

We have a flexible working environment. We attract engineers from all over Ireland. Um, we embrace flexible working and working from home.” 

JLR is also keen for the physical and legal infrastructure to improve in Ireland which lags way behind many of its European neighbours in terms of charging points.  On top of that, no autonomous car is permitted to be even tested on Irish public roads, so that’s why JLR needs its own test track.

When asked what one or two things he’d like to see changed to speed up the automation and testing side of self driving cars, Cormican is clear:

“I think accelerating more technology courses in those universities and colleges is important. But one thing that's quite specific is legislation for the testing of autonomous vehicles on Irish public roads under very strict safety guidelines is something we've been asking for quite some time.”

If Cormican gets his way there might be phantom drivers cruising around the west of Ireland in gleaming SUVs in the very near future.

Trapping Graft in Strasbourg parliament

Joe Lynam - Newstalk Business Editor  

It’s been written before but there is no city as beautiful and yet as inaccessible as Strasbourg.  They picked it because the French and Germans had gone to war over it three times and it’s a symbol of the (hopefully) permanent peace between the two neighbours. France got to keep a place with German names, German architecture and on the German border.

But Berlin and Paris must have been relieved that - so far - none of their nationals have been implicated, arrested, searched or charged with anything to do with ‘Qatargate’.

Instead it's Athens and Rome who fret as Italian and Greek surnames appear all over this enveloping scandal.  Four people linked to those nations have been arrested and some already charged by the Belgian authorities.  Eva Kaili is in a Brussels prison but has said she broke no rules.  A court service strike has delayed her appearance before a Belgian judge. But her workplace - the European Parliament  - has already stripped her of her role as vice president and her political party - Pasok (home to the Papandreou political ascendancy)-  has fired her.  

So the mood was as icy last week as the weather when hundreds of MEPs made their way to the Alsatian capital.  So did I, in a travel odyssey that could feature in any remake of Planes, Trains and Automobiles - without the comedy.

I had pre booked and confirmed an interview with the president of the EU Parliament Roberta Metsola a week in advance but I was not shocked when she cancelled on Monday night as I was sitting on a bus from Frankfurt to Strasbourg with a bunch of MEPs - scrambling around on mobiles to find any new morsel of information about the institution of which they are the face.

I watched with them Ms Metsola’s incandescent speech (and her first public pronouncement) on the scandal on Monday evening - some of which was confected but most of which was white hot anger that her well laid legislative plans were set to be benched and overshadowed by the filthy caravan of bribery and graft that had wheeled into town and parked in her driveway.

All other votes and proposals were rendered irrelevant over the next few days.  The brave Ukrainian emergency workers who received the Sakharov peace prize, the latest package of sanctions on Russia - even the looming trade war with the USA over state aid had had to step aside as the bright halogen light of MEPs accepting suitcases of cash for diluting any criticism of the oil rich World Cup hosts- blinded all other stories.

I started and ended the two shows that we broadcast live from the gleaming radio studios within the belly of the Parliament, with Qatargate.  I didn't want to but I had to. I spoke to many MEPs and former MEPs including Commissioner Mairead McGuinness about the black brush which was tarring the entire institution. 

And then as I queued up for lunch in what is probably the worst laid out building in Christendom, my phone vibrated with a message from the head of comms of the President. 

Would I be able to come right now to her office for an interview?    My heart raced.  Ms Metsola had eschewed all other planned one-on-one interviews, keeping her powder dry for big speeches before her Plenary peers. 

I said I'd gladly do the interview but only on the condition that she answered questions about bribery as well. She agreed and I was brought to the 15th floor presidential suite overlooking the snow capped European quarter of Strasbourg and including the ‘talking shop’ of the Council of Europe - now denuded of Russian membership.

Roberta Metsola is a ‘young’ president. Unlike her three predecessors, she abounds with energy and purpose.  Her term is for less than three years and so she needs to make a mark on European legislation in that time.  This graft crisis ensures that she may now become better known than all her predecessors - ironic given she’s from the EU’s smallest member state, Malta.

She arrives in the reception area of her own President zone at around 2.25pm -nibbling on a pretzel - not exactly the lunch of kings or queens - but something to tide her over as she moves (at a fair pace) from meetings, to awards ceremonies, to chairing plenary sessions, press conferences and now media interviews - though she only did one: mine. 

She speaks in French to the formally dressed and silver-chain-wearing custodians of the parliament, English to her staff, Italian and Maltese in her home country and she probably has picked up Finnish from her husband.

I start our interview by asking how she’ll vote on the amendment to suspend the open skies agreement signed last year between the EU and Qatar.  And agreement which appears to benefit only one airline: Qatar Airways.

Then I raise the fact that MEPs can hire whoever they want and no one gets sanctioned if they don't declare meetings with lobbyists etc.  She remains unflustered as you will hear and remains chatty and engaging afterwards.  Even though I was told I'd get only 8mins, I was still in her company 26 mins after the 1st handshake.  

Pleasantries aside, she will have some job reforming an institution which has resisted reform and true transparency for decades. A kind of Orange Order with better offices. 

And she’ll be under pressure to do so from the two other major EU institutions:  the Commission and the Council.  That’s because the latter two - although not directly affected by this brewing scandal- know that they too will be tarred with its putrid graft-imbued brush.  If Metsola can't clean up her own house, the garbage will spill out all over the neighbourhood.