SUPPORT FOR SMALL BUSINESSES AS TAX RELIEF IS EXTENDED
A THREE-year extension to the tax relief for business start-ups was welcomed last night.
In his Budget speech yesterday, Paschal Donohoe had said the Government ‘recognises the value of SMEs to the economy and to job creation’, and he would legislate to extend the three-year tax relief ‘for certain start-up companies until the end of 2021’.
Neil McDonnell, of the Irish Small and Medium Enterprises Association, said: ‘We welcome it. It’s a small concession but one of the few we got out of it. In view of the lack of any movement we’ve seen in other entrepreneurial areas, it’s the one thing that is quite welcome.’
He said it was difficult to definitively say how much the move would be worth to different firms. ‘It’s like a piece of string,’ Mr McDonnell said. ‘It depends how much the company earns.’
Mr Donohoe also noted the increased importance of crowdfunding, or informal backing by a large number of investors, for businesses.
‘My department will begin work, in conjunction with the Central Bank, on the regulation of crowdfunding,’ he said. ‘As part of this process we will review the withholding tax obligations for peer-to-peer lending activities, with a view to their amendment as appropriate.’
Meanwhile, retailers yesterday complained that the Government had missed a trick by failing to help struggling retailers finding it difficult to compete.
Shop owner Damian Duggan of Duggan’s jewellers in Dublin said more and more retailers were struggling to compete because of the Government’s ‘penal’ VAT rate of 23%. He said the Government had not introduced anything in the Budget to help them.
Mr Duggan said: ‘Give us a level playing pitch, give us a level where we can compete. We’re being crippled.’
Retailers, such as book shops, newsagents and jewellers, are liable to pay VAT at 23%.
The jeweller said: ‘There are an awful lot of businesses that are on the verge or they have closed in the last few years because of very penal VAT rates.’
He said the VAT rate had been increased from 21% to 23% as a temporary measure eight years ago, but there was no sign of it being reverted any time soon.
Marc O’Dwyer, chief executive of cloud accounting software firm Big Red Cloud, said the Government had missed an opportunity to help small businesses. The Dublin-based company has 25 employees in Ireland and five in Vietnam.
He said: ‘There are about 200,000 small businesses in Ireland and about 3,500 businesses are set up on a monthly basis and there don’t seem to be any grants or tax reliefs for existing business owners to reinvent their businesses, who are on a daily basis employing staff, paying employers’ PRSI and paying money to the Irish Revenue.’