Tax Partner Crowe
TAX REFORM The area of employee share-based remuneration needs fundamental reform. SMEs find it impossible to compete against remuneration packages provided by large multinationals, particularly in the area of share-based remuneration. It is probable that remote working will increase this challenge.
The KEEP scheme is clearly not attractive. By contrast, in the UK the Enterprise Management Incentive (EMI) and Share Incentive Plans (SIP) schemes offer favourable tax treatments to employees, have clear rules, and are simple to administer. The finance minister should introduce similar schemes here, use similar rules, and ensure that the administrative burden does not make these schemes unattractive.
TAX WAREHOUSING Our advice is to treat warehoused debt as being like bank debt, and to either pay down the debt when possible or have a clear repayment plan. However, once a repayment plan is agreed with Revenue it may be difficult or impossible to change this plan. This is likely to cause a considerable cashflow burden, which will put an incredible strain on businesses.
ENTREPRENEUR RELIEF This is still a relatively new relief and there are few precedents to rely upon. Should Revenue agree that the established precedents that exist for Retirement Relief could also apply to Entrepreneur Relief, this would be of great benefit in giving certainty to many transactions, where currently it is unclear that the relief could apply.
With regard to Retirement Relief, when establishing a company, business owners should consider splitting the shareholding with their spouse to maximise the amount of relief that may be claimed. Any person considering selling their business in their fifties should seriously look at this relief in their late forties and implement any changes that need to be made, to ensure that the relief is available.
‘The KEEP scheme is clearly not attractive’