the size of the new fund for Brexit loans to SMES support to get really ready to defend their position in the UK and to extend their export reach. In that sense there’s still a lot of work to go in terms of being prepared for the impact.”
Eoin O’neill, president of the British-irish Chamber of Commerce, believes that the Brexit loan scheme will be crucial to help smaller companies develop new markets. He highlights one largely missed detail that, at first glance, would seem to have little if anything to do with small, struggling Irish companies.
“The announcement of the additional €23m for foreign affairs and the announcement by Minister [for Foreign Affairs Simon] Coveney of the opening of five new embassies may not sound very significant to people. But I’ve been on the ground with ambassadors and I’ve seen the impact they have in a local market and their ability to start to open doors.”
But for many SMES struggling to keep the doors open, thoughts of new far-flung markets are remote indeed. Supermac’s founder Pat Mcdonagh has spoken regularly about the problems faced by small businesses in Ireland, from planning to insurance to red tape.
“It’s a neutral Budget, a fiver for everyone,” he said, adding that he did not see many measures that would help SME owners that face unique difficulties.
“The big multinationals get incentives to come in here and get a good tax deal. Small business by contrast does not seem to be able to get through government to bring about the changes they need to help them,” he said.
One such change that was widely touted ahead of Budget day was a possible cut in the 33pc rate of capital gains tax for entrepreneurs, but that did not materialise.
But one measure that could prove very beneficial to SMES is the introduction of the Key Employee Engagement Programme, KEEP for short. It is a new share option scheme that will mean staff will pay less tax on share options from their company. Minister Donohoe highlighted the scheme as a boon to SMES at the Budget Breakfast event, which was organised by INM.
Graeme Mcqueen, head of public affairs at Dublin Chamber of Commerce, said it was something that his body had been pushing for for a long time: “The only disappointment with it was that the rate of CGT that will be charged on it when you do eventually sell the shares is 33pc.
“The UK has a scheme where that rate is 10pc. What we always say as a Chamber is that we need our tax regime for SMES to match or better, or certainly rival, what’s in the UK.
“It’s a welcome move but there’s probably work we can do in coming years in coming Budgets to make that even more attractive for companies and for staff as well.
“We’d probably have liked to see more in terms of CGT improvements. We’ve made good progress on that in the last couple of Budgets but there was nothing really on that this year. So that’s probably something that we’d like to see revisited next year.
“But overall I think we were fairly happy given it wasn’t the most adventurous Budget. For business, I think we did OK.”
Kildare-based accountant Pat Sutton agrees that the share option move is one with a lot of potential for the type of SME clients with which he deals regularly.
“That is something that SMES might have a serious look at but there is a lot more that could have been done. It’s a steady kind of Budget but there are a couple of areas that just were not addressed. “Leaving the entrepreneurial relief threshold at a €1m is a problem. Look at the UK, where it is £10m. I thought they would address that.”
The self-employed earned income tax credit increased to €1,150. But, said Sutton, it should have gone to €1,650 to match the situation for PAYE workers.
“It penalises self-employed people yet again. It’s no different than the 3pc USC surcharge on incomes over €100,000 for the self employed. What about PAYE workers earning over €100,000? Why the distinction between one and another?
“There is a fairness issue there that has not been addressed. They really could have done more for the self-employed,” said Sutton.
Donohoe’s key message since the Budget has been that his key priority was to return stability to the public finances and no one would argue that he has not achieved that. He has indicated that next year he will have room to do more of what people might want and the SME sector will be waiting and watching to see if he lives up to that promise.