€300m

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

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.

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