Small Firms Association welcomes Budget 2016

Tuesday, 13 October 2015

Budget 2016 Good News for Small Businesses

Statement by AJ Noonan, Chairman, Small Firms Association
  • CGT rate reduction a significant boost for small business owners
  • Move to tax equalisation for self-employed welcome
  • Increase to incomes through USC reductions and childcare support should boost domestic economy

The Small Firms Association (SFA) has welcomed the announcement of Budget 2016 today. SFA Chairman, AJ Noonan, commented: "This Budget is a strong endorsement by Government of the importance of entrepreneurship and small business in Ireland. The reduction of Capital Gains Tax to 20% for small businesses will greatly assist investment capacity when they are selling on their business. It will be a significant boost to serial entrepreneurs looking to start new ventures and create more jobs and will stem the flow of investment to the UK which has a 10% entrepreneurial tax rate. We await the detail to ensure that it is a simple, no nonsense system."

The SFA Chairman also welcomed initial moves by the Government "to end the discrimination in the tax system against self-employed and proprietary directors. This has been a long-fought battle and it is great to see that the risk takers and job-creators in the economy will be treated equally by the tax system. Along with the introduction of the PAYE tax credit, we will continue our campaign to abolish the additional 3% USC that self-employed face and the lack of a social welfare safety net in next year's Budget."

The SFA also endorsed the Government's target of reducing the marginal tax rate to beneath 50%, with reductions in USC. Chairman Noonan commented "The extra €600mn back in people's pockets will be a serious boost to the domestic economy, such as retail and hospitality, which is still struggling in many parts of the country. This along with the childcare subvention will support working parents and will increase participation rates, in particular of females. It should also relieve wage inflation pressures and thus help small business competitiveness."

The SFA also welcomed a range of other measures which small businesses have called for. "The announcement of a reduction in the charges business face when they accept card payments is welcome and we encourage small businesses to pass the savings on to their customers. The EIIS, Knowledge Development Box measures and the end of the pension levy are all contribute to making this a positive Budget from a business perspective."

Chairman AJ Noonan concluded "as expected, the Government announced its acceptance of the 50c (6%) proposed increase in the National Minimum Wage rate by the Low Pay Commission. This is concerning, as it will have a very negative impact on businesses in rural areas that have very low profits and no potential to pass on such cost increases into the market where inflation is predicted to be 0% this year. The reduction in employer PRSI costs, along with changes to the employee PRSI system, is welcome, but does not go far enough. For some small businesses, this will mean they have no choice but to reduce hours, lay people off or delay recruitment."

Ends

EDITOR’S NOTE
A full copy of the SFA’s pre-Budget 2016 submission is on www.sfa.ie

For further queries and interviews, please contact SFA Chairman, AJ Noonan on Tel: 086-2592610

Patricia Callan, on tel: 01-6051602 / 087-6999345, email: patricia.callan@sfa.ie or Tweet: @SFA_Irl
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