SFA seeks commitment from Govt on Self-Employed in Spring Economic Statement

Monday, 27 April 2015

  • SFA Calls for Government’s Spring Economic Statement to tackle self-employed discrimination
  • SFA 3-Point Plan will drive Entrepreneurship & Job Creation

The Director of the Small Firms Association, Patricia Callan, has called on the Government to commit to and outline in more detail its mooted proposals to end the discriminatory tax and social welfare treatment of the self-employed and Proprietary Directors in its Spring Economic Statement (which will be announced this Tuesday, 28th April). “There is a real need to support people in embarking on their entrepreneurial journey, as without the risk-taker / the owner-manager, no jobs can be created. Therefore it is important that they are at least treated equally if not indeed more preferentially than employees”, commented Mr Patricia Callan.

Specifically, the SFA is advocating the introduction of its 3-Point Plan by Government:

Introduce a voluntary PRSI rate for the self-employed
“This should enable them to claim unemployment benefit should their business fail and would alleviate some of the risk associated with starting up a business. The scheme should run on an opt-in basis for already established businesses”, commented Callan.

Tax treatment of self-employed / Proprietary Directors and employees must be equalised
“Specifically the additional 3% USC on earnings above €100,000 only for self-employed must be abolished. This was promised by the end of 2014, but the Government failed to deliver on this commitment in Budget 2015”, stated Callan. “In addition, the PAYE tax credit should be available to all who pay tax on a PAYE basis. Currently a self-employed person on €15000 is 6 times worse off than the equivalent employee, because of this discrimination”, noted Callan.

A unique CGT rate should be introduced for entrepreneur’s selling their business
“For example, in the UK, you only pay 10% CGT if you sell or close all or part of a business, on condition you've held the share for at least a year and you are a director, partner or employee in the business. The existence of such a scheme in our closest competitor economy means that business HQs here will be moved to the UK prior to sale with the consequent loss of jobs here. Introducing a comparable rate here would give a tremendous boost to business sale and acquisitions activity”, commented Callan.

SFA Director, Patricia Callan outlined the phenomenal job creation potential of Ireland’s small business community.
  • 143,266 small firms (less than 50 employees) employ 862,175
  • An additional 49,195 people are self-employed
  • Dublin, Cork and Galway lead the way for entrepreneurship with Leitrim, Longford & Roscommon at the lower end of the scale
  • 97% of all businesses are small; 84% are micro (less than 10 employees)

Callan stated: “By focusing on the entrepreneurial sector, we can deliver real national and balanced regional growth. However this will only be possible if the Government implements our three-point plan. The Government must continue to be prudent in the overall administration of our public finances, but they must be willing to invest in measures which will in turn generate even more economic activity and job creation, which will ultimately boost tax revenues overall.”

“Prioritising government spend in these areas is much more justifiable than increasing public sector pay in an environment where inflation rates are still beneath 2008 levels”, concluded Callan.


For queries and interviews, please contact SFA Director, Patricia Callan at Tel: 087-6999345, e-mail: patricia.callan@sfa.ie, Twitter: @SFA_IRL