RONAN McGIVERN

International Tax Partner RBK

‘A review of the taxation of employee share schemes is warranted’

TAX ISSUES Post-Brexit we are seeing more queries from clients relating to VAT and customs. This area is by far the most burdensome for our clients who have experienced issues with importing goods and exporting goods to the UK, and who are trying to get to terms with the new rules and putting in place new processes and procedures.

CAPITAL TAXES It is well established that where tax rates are high, there is no incentive for businesses or investors to realise their investments. When the Capital Gains Tax rate was halved from 40% to 20%, the government increased its yield from CGT significantly. A CGT rate of 33% is too high, particularly in relation to real estate, where the government is grappling with a housing crisis due to supply shortages. In relation to Capital Acquisitions Tax, I think that rather than focusing on the rate the government should increase the tax-free thresholds.

TAX INCENTIVES The government has bolstered tax supports for SMEs, including increased R&D credits for small and micro enterprises, extension of the exemption for new start-up companies and maintaining the 12.5% rate of corporate tax for smaller businesses, despite significant international pressure to increase the rate. A review of the taxation of employee share schemes is warranted, as the current approach does not encourage employee share ownership in indigenous enterprises.

EIIS The introduction of selfcertification for the Employee Investment Incentive Scheme was a retrograde step. Under the current model there is an inherent risk that Revenue could challenge entitlement, which is in no one’s interest. Having a proper ruling system in place within Revenue would be of huge benefit to taxpayers, as well as to Revenue.

EXIT RELIEFS Although there is a general awareness among business owners about the concepts of Entrepreneur Relief and Retirement Relief, we find that there is less of an appreciation for the underlying conditions required to be satisfied before the reliefs are available. Sometimes business owners simply assume the reliefs are applied automatically. We recommend that business owners consider their exit strategy at an early stage and structure to ensure the conditions are satisfied from the outset.