Budget 2014 Must Focus on New and Existing SMEs
Aug 22, 2013
Improvements to EIIS and SCS Will Support This
Chambers Ireland has today (22/08/13) called on the Government to use Budget 2014 to support new and existing small businesses. Rather than just looking to introduce new measures, the Government needs to take a look at initiatives already in place and examine how they can be of more benefit to business. The Employment and Investment Incentive Scheme (EIIS) and the Seed Capital Scheme (SCS) are two examples.
Chambers Ireland made a number of recommendations as to how the Government can support SMEs and entrepreneurs in our Pre Budget 2014 Submission.
Speaking this morning, Seán Murphy, Chambers Ireland Deputy Chief Executive said, “The EIIS and the SCS are two programmes which possess huge potential but are currently underused. Both of these schemes are currently under-profiled amongst businesses. Funding availability for EIIS has consistently fallen since a peak in 2007 due to the restrictions that are currently in place.”
“Budget 2014 needs to focus on SMEs and entrepreneurs, and as such these existing schemes should be modified to raise awareness and encourage participation. Schemes such as these, along with other measures suggested in our Pre Budget submission, have the potential to really help SMEs by providing additional working capital that is very much needed at this time,” he concluded.
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For further information contact Amy Woods, Chambers Ireland on 01 400 4319, 086 6081605 or email firstname.lastname@example.org
Notes to Editors
Employment and Investment Incentive Scheme (EIIS) Recommendations
We note that use of the EIIS has fallen dramatically from an investment peak in 2007. Chambers Ireland has a number of suggestions to improve the use of and access to the EII scheme, with a view to ensuring that more firms from more sectors use this worthwhile initiative:
1. Consider introducing a ‘Seed Employment and Investment Incentive Scheme’ targeting investments in seed/early stage companies with an upfront income tax relief of 41% and greater facilitation of Business Angel investors;
2. Remove the high income earner restriction;
3. Reinstate the minimum holding period of five years;
4. Ensure that that medium-sized companies in non-assisted areas automatically qualify under the new EU risk capital guidelines for this scheme;
5. Review the impact of broadening the scheme on higher risk and early stage internationally trading businesses; and
6. Simplify accumulation rules.
Seed Capital Scheme (SCS) Recommendations
While recognising that Government has sought to enhance use of the Seed Capital Scheme, we believe that more could be done to grow the number of individuals applying for it. Over the past six years large numbers of well trained and educated people have become unemployed. Many of these workers paid substantial amounts of income taxes in the years prior to losing their jobs. SCS could be the vital key to enabling them to fund the early months of their new business. This can only be done if the scheme is profiled more extensively. Chambers Ireland suggestions in this regard are as follows:
1. The scope and activities of the SCS should continue to mirror the EIIS;
2. Even greater promotion of the scheme is needed;
3. Revenue Commissioners should provide outline approval for SCS claims to facilitate the securing of funding/investments from other sources;
4. Revenue should commit to processing income tax refunds quickly to aid start up firms with cash flow; and
5. Government should consider options for making the scheme more attractive to the self-employed.