TAX RELIEF FOR FIRST TIME ENTREPRENEURS

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It was announced this month that there will be a revamp of a previously existing entrepreneurial scheme. This newly revamped scheme will mean that first time entrepreneurs will be able to claim back thousands of euro in tax relief in order to offset their start-up costs.

 

The SURE scheme (Start-Up Relief for Entrepreneurs) was recently launched by Finance Minister Michael Noonan and Jobs Minister Richard Bruton. The scheme comes as a response to the latest employment figures, which suggest that two thirds of all new jobs are created by new start-up companies. Minister Bruton has stated that this new tax relief is important because many start-up companies have “fallen into pitfalls where cash runs out before their potential is fulfilled.” This new scheme could mean increasing longevity for these companies who may need an extra push in today’s difficult marketplace.

 

Some of you may remember that a similar scheme had previously been in place as well as the capital gains tax incentive for new entrepreneurs. Mr Bruton has suggested that this previous scheme received a relatively small amount of interest, as there was a lack of understanding about what was involved in the process. It is hoped that the SURE scheme will offset these difficulties as it essentially involves directly offering assistance to those considering starting their own business. The funds will be offered up to a value of 41% of the total capital invested. Depending on the size of your investment you may be entitled to a refund of income tax paid over the 6 years prior to year in which you invest.

 

So, how do you know if you qualify for this scheme? The following are the basic guidelines:

 

You must:

  • Establish a new company carrying on a qualifying trading activity.
  • Have mainly PAYE income in the previous 4 years.
  • Take up full-time employment in the new company and not be employed elsewhere.
  • Make an investment by purchasing new eligible shares.
  • Hold at least 15% of the issued share capital of the company for 12 months.
  • Ensure that the company is a qualifying new venture.
  • Ensure that the company is incorporated in this or another EEA State.
  • Ensure that the company is between a micro or medium-sized enterprise.
  • Ensure that the company does not have any trading arrangements with your former employers.
  • Ensure that the company is not controlled by any other company.

 

These are, of course, just the basic guidelines to give you an idea of how to qualify for this exciting new scheme. If you should be interested in assessing your own eligibility for the SURE scheme, we at DCA Accountantsare here

10 WAYS TO IMPROVE YOUR WORK-LIFE BALANCE

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With the recent Mashable infographic shedding light on the fact that just 77% of Irish employees are satisfied with their work-life balance, we felt that it would be important to offer some tips to employees and employers on improving your work-life balance.

 

Judging by this infographic, Irish workers are by no means the most dissatisfied but is 77% really enough for Irish employers? Mexico log the greatest number of hours at 2,226 and boast 82% satisfaction, so before we hop onto the Netherlands job hunt or hot-foot it to Mexico, what can the Irish employer or employee do to increase satisfaction with our work-life balance?

 

The issue of work-life balance is an important one which if left unaddressed can lead to unhappy workers and by extension an unhappy working environment. Some key tips for improving your own balance and that of your employees are as follows:

 

  1. Take responsibility for your own work-life balance: If working demands begin to overwhelm you, it is important to speak up. As an employer this is when the importance of delegation arises.
  2. Make use of your lunch break: this might seem like an obvious one but there are a surprising number of us who regularly choose to eat our lunch at our desks whilst still working. When possible, make use of your lunch break and even take a walk to clear your mind and set yourself up for the rest of the day, you may even find yourself more productive after this time.
  3. Make use of your commute: If, like so many of us, you find yourself on some form of transport idly worrying about the day ahead, try making use of this time by either making a plan of your day or making a small start on some of your tasks. Having this time to focus may clear your mind so that when you step foot in the workplace you are prepared for the day.
  4. Don’t bring work home: Obviously, this is not always possible but when you can, it is important to draw a line between your working and personal lives which will see your rest time at home become more enjoyable and beneficial.
  5. Time your tasks: Giving yourself a set amount of time per task means less time wasted and will drastically increase your productivity giving you more time to utilise elsewhere.
  6. Schedule family time: If you feel that your working hours are consuming your entire day, step back and schedule some time for family and friends. This time will help you disconnect and remember all those important reasons why you go to work in the first place.
  7. Take up a hobby: Having a hobby is a great post-work stress reliever as is exercise. Focusing your energy on your other passions outside of work may be the boost your working life needs.
  8. Track your working hours: Make a note of your working hours in the office as well as those you spend working from home. Having a visual reference of this may help you better divide your time between working life and home life.
  9. Make plans: Whether it’s that holiday you’ve always wanted to take or simply a few days off to spend in the company of family and friends, having a plan gives you a distinct goal and something to work towards as well as look forward to.
  10. Switch Off: Unless waiting for something important, try not to consistently check your work emails. This is a big ask in today’s digital age but it something which can greatly improve your work-life balance and overall satisfaction.

 

Even reclaiming one hour per day for yourself outside of working hours can make a vast difference to your health and overall mood. In turn, this is beneficial to employers as a happy workforce will be a more productive workforce.

BETTER LIFE INDEX

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We have all felt that Sunday dread, that slight ache in the stomach that signifies that another Monday is rapidly approaching despite the weekend passing at the speed of light, and we have all woken up on a Monday morning only to stare bewildered at our alarm clocks – but, haven’t I already done a Monday morning recently? Given the amount of memes that spring up on Sunday evenings like this one, you would be forgiven for thinking that Irish workers surely have the longest working hours in the World. Are we just exercising our moaning rights as Irish citizens, or the Earth just spin that much slower between the hours of 9-5 in Ireland? Realistically, just where exactly does Ireland fall in terms of working hours worldwide and that all important work satisfaction rating?

 

Mashable have recently put together an infographic based on information from the OECD’s Better Life Index. This shows where Irish workers sit in terms of working hours worldwide, as well as the percentage of satisfaction with the work-life balance. This image compares date from across 35 countries, showing how many hours the average Irish worker works in comparison to other countries. Ireland sit in sixth place in this table with 1,529 hours per year spent in the workplace in comparison to our UK neighbours who log 1,790 hours per year. The Netherlands spends the least amount of hours in the office with a total of 1,381 hours per year. This is an important example of international working hours and general job satisfaction which we think would be a beneficial read for all Irish employers and employees. We aren’t quite tipping the top of the table with our working hours, and yet only 77% of Irish people would say that they are satisfied with their job, working hours and their work-life balance.

 

worklife

NEW COMPANIES ACT OF 2014

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From June 1st 2015, the Companies Act of 2014 will come into effect. This new Act will replace the existing Companies act, which was in place from 1963-2013. This is the largest reform of Irish Business Law that we have seen in decades. Its purpose is to make running a business in Ireland easier. This new Act will carry on some of the features of its predecessor and will have a number of new features including:

  • All company directors must be over 18.
  • Existing private companies must choose their new company type: a private company limited by shares or as a Designated Activity Company (DCA).
  • A new company type will be created; a private company limited by shares can be registered with the CRO (Companies Registration Office). This company can be a single director company.
  • Private limited companies will be entitled to have a single director but all companies must retain the office of the company secretary.
  • All company directors who are subject to a foreign disqualification must file an appropriate form with the CRO.
  • There will be changes to the registration procedures, and required methods of notifying the CRO.
  • External companies will no longer be able to register a place of business.
  • As of June 1st 2015, all existing external companies registered as a place of business will be deleted.
  • A company will no longer be required to have an annual general physical meeting, instead an annual general written meeting will now suffice.
  • The existing duties of directors are translated into eight principle duties, which will apply to all directors.
  • Reintroduction of the requirement that directors provide compliance statements.
  • Some holding companies will be exempt from the obligation to prepare audited group financial statements where they and their subsidiaries do not exceed certain thresholds.

 

With all these changes in mind, what does this new legislation mean for you and your company?

 

The most important thing this means for you and your company is that integral changes to your business, whilst often stressful, must be made and this will be the ideal moment to begin deciding what changes can truly benefit your company.

 

Despite this legislation not coming into effect until June 1st, companies and their directors must now begin to prepare for these changes to come into effect.  At this juncture, it would be wise to begin looking at your company structure and making decisions about what structure and accompanying rules best suit your company.

For example you may want to remove the second “silent” director from the company that never had any involvement in the running of the business.

 

There will be a transition period of 18 months from June 1st to allow companies to act upon the relevant changes. If a private company has not chosen their new company type during this time, it will automatically become a new private limited company with a single-document constitution. This company type does not allow for the future changing of articles contained within its constitution.

 

This new default will naturally not be appropriate for all companies and this is a good moment to begin doing some housekeeping within your company. Taking a closer look at your company now may make all the difference in the future and, as always, DCA Accountants are available to provide any guidance necessary during this period of transition for your company.

MANDATORY TRADE UNION RECOGNITION

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In the wake of the recent and much publicized dispute between Dunnes workers and management, the notion of mandatory union recognition in Ireland has once again be raised. Some have suggested that this could be the answer to this and similar disputes in the future, whilst others have pointed to ways in which this change in employment legislation could have devastating effects for Irish SMEs.

As recently as just this week, SIPTU General Secretary Jack O’Connor walked off the ‘Tonight with Vincent Browne’ show whilst live on air, demonstrating that this issue remains a hotly contested one. With these recent disputes in mind, this topic could well see itself forming part of the proposed election plan for some parties. As such, it is vital to be informed of what such a change in legislation could mean for you and your business. The implications of mandatory union recognition for employers who do not currently recognise unions could be far reaching.

The trade union movement are naturally already pushing hard for recognition, meaning that this legislation could very well come into place during the next general election. The major issue for businesses in Ireland, particularly SME’s is that no one really knows ahead of time what effect this could have on doing business in Ireland, so should we really be willing to take this risk?

Currently it is a matter for each individual employer to decide if they recognise trade unions in the workplace. At present, employers are under no legal obligationto do so. Many employers – from SMEs to major businesses choose to deal with their employees directly on a contract-to-contract basis and without the involvement of trade unions. Some have felt so strongly about this issue that they have taken to the courts in an effort to avoid mandatory union recognition.

The Irish constitution states only that citizens have the right to form associations and unions, and allows for employers to choose not to recognise these associations. Due to this entry in our constitution, legislation to provide for compulsory trade union recognition has until now been considered to be an unconstitutional notion.

During the much-publicized Ryanair dispute of 2007, Mr. Justice Geoghegan stated that:

“As a matter of law, Ryanair is perfectly entitled not to deal with trade unions nor can a law be passed compelling them to do so. There is an obvious danger however in a non-unionised company that employees may be exploited and may have to submit to what most reasonable people would consider to be grossly unfair terms and conditions of employment.”

This, in a similar manner to the wording of the entry in our constitution is vague, and merely offers both employee and employer the option to choose whether or not to engage with trade unions. Many have recently pointed to this as being the very reason that foreign businesses are so attracted to business in Ireland, the fear being that if we lose this USP, will we also lose their business? It has been widely argued that our current model allows for greater flexibility in dealing with employment disputes.

In 2013, then IBEC director Brendan McGinty stated that: “Mandatory trade union recognition would not create a single job in this economy and would instead threaten many thousands of jobs by damaging our capacity to attract and retain inward investment. Mandatory union recognition would only put off companies that are considering investing in the country and would act as a barrier to job creation.”

This is a topic that is bound to remain controversial and will divide opinions greatly. For SME’s in particular the notion of having to add compulsory trade union recognition to already full basket of responsibilities on a low budget is bound to be threatening.

With a looming general election there will be a barrage of arguments from both sides of this argument, but many remain wary of compulsory union recognition.

If you feel that this might be a damaging move for your own company, we would suggest talking to your local representative about any proposed legislation.

MARKETING TIPS FOR SMES

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Setting up a new business can be a stressful and trying time. With everything that comes with the organisation and funding of a new company, marketing can often be something that is overlooked. Given that a start-up company must make itself known in order to generate income, marketing can be seen as being arguably one of the most important things to consider. Marketing, and in particular digital marketing is somewhat of an enigma for the smaller company. As such, in order to lift the veil we have compiled a list of marketing tips to assist you in creating and sustaining a viable marketing plan for your business.

1. Social Media.

The marketing of all businesses can benefit in massive ways through the use of social media. There are so many avenues of social media to choose from and each one brings something different to the table. Whilst LinkedIn is ideal for attracting workers and generating employment interest, Facebook and Twitter are more immediate avenues of communicating with prospective customers. Whilst you can make use of each of these, it is important not to flood feeds and it has been suggested that the ideal posting schedule for Facebook is 1-2 per day whilst Twitter is more open with 6-8 posts per day being the norm.

2. Search Engine Optimisation (SEO).

Search Engine Optimisation is one of the lesser known and used marketing tools at your disposal. Whilst your website design may be perfect, it remains useless if it is never seen. Your website’s performance is reliant on traffic and SEO may be the ideal way to generate traffic. Search Engine Optimisation allows you to choose where your website appears in searches in order to ensure that you are visible in the online world.

3. Content is King.

You may now have figured out and utilised the search engines at your disposal, but is your website holding the interest of its visitors? It is vital to ensure that your content immediately grabs the attention of its readers. It has been reported that the modern day site user spends around 4 seconds on a webpage before deciding whether they will continue, so you must utilise text and video to grab and hold the attention of your customer.

4. Make a name for yourself.

What’s in a name? The answer might well be your businesses future. The name of your business will become its identity so it is important to ensure that it is something you can market efficiently without running into problems.

Hopefully not to be confused with blah, blah, blah. Blogging is one of the easiest and most immediate ways of connecting efficiently with your customers. Creating and managing content that will interest your clients may be the difference between keeping and losing customers.

SBCI LOANS

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Strategic Banking Corporation of Ireland

In March of this year, a new low-cost loan fund was announced by the SBCI. This new fund could see SMEs and the farming sector have greater ease of access to much-needed funds through some of the country’s major banks. As of late March, its board of six directors has been confirmed, taking this from a pipe dream to a very real and tangible option for the growth of smaller Irish businesses.

This fund will offer long-term working capital through major lending institutions. Its purpose is to offer SMEs and the farming sector more flexible products than are currently available to them. They will offer low-cost funding to financial institutions. The idea being that these savings will then be passed on to SMEs. AIB and Bank of Ireland have already signed up as partners.

So what is the SBCI?

The SBCI is the Strategic Banking Corporation of Ireland is a new bank launched in the last quarter of 2014. It is hoped that it will become the primary source of funding for SMEs in coming years with the Government hoping that over €5billion will be made available to SMEs in the future.
The initial funders for this new banking venture are the Ireland Strategic Investment Fund (ISIF), the European Investment Bank (EIB) and the KfW German promotional bank.
The SBCI is a strategic SME funding company with the primary goal of creating access to flexible funding for Irish SMEs. The SBCI aims to:

  • Provide flexible products with flexible repayment options.
  • Provide lower cost funding to major lending institutions to be passed on to SME’s and the farming sector.
  • Create real market competition for new entrants to the SME lending market.

AIB are currently offering customers looking for a new business loan of up to €30,000, an answer within 48hours. They are also offering loans at a 2% discount from their Standard Business Loan Rate. Funding of up to €5m for the growth and expansion of your business will be made available. Their terms will be between 2 and 10 years.

Is a loan with SBCI the right choice for your business?

These loans are open to most SMEs. This form of funding is open to your business providing it meets the following criteria:

  • The company must have a turnover of €43m or less.
  • The company must not be part of a wider group of businesses.
  • The company must have less than 250 employees.
  • The company must have a significant presence in Ireland.
  • The company must have less than 25% of their capital held by public bodies.
  • It is important to bear in mind that your chosen lending body will need to share your information with the SBCI

We would advise consulting with your local participating lending body in order to ascertain your company’s eligibility for this scheme. If you have any queries at all about this fund and how it could benefit your business, please don’t hesitate to contact us at DCA Accountants.

WHAT DOES THE IRISH TECH HUB MEAN FOR SMES?

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Despite the on-going issues caused by the economic downturn, Ireland has found itself becoming somewhat of a technology hub as we have seen a dramatic increase in the number of tech companies setting up shop in Ireland.

Companies like EBay, Microsoft, Facebook and Google already have bases in Dublin, paving the way for Ireland to become a technology powerhouse, leading to an increase in Irish job generation. The tech sector in Ireland has become an important job creator as we consistently see new companies seeking workers in Ireland.

Our tech sector shows that we have a young, skilled and vibrant workforce with a variety of marketable skills in the IT sector. Apple in the 80’s showed that we have skills in the manufacturing sector, which prompted other companies such as Microsoft to open up shop. These companies have since showed that we have skills in OS development and infrastructure that has now drawn in companies such as Google, Amazon, and eBay among others.

The question is; what does the existence of an Irish tech hub mean for smaller Irish start-ups?

The outlook for tech companies in general in Ireland is promising, and the existence of globally known multinational companies might intimidate smaller Irish tech start ups, but in reality as the tech world is constantly changing the floor is open for Irish tech SMEs as well as larger multinationals.

Small start-ups can get started as an offshoot of the larger ones, and the existence of the larger ones creates a tech economy that otherwise might not exist. Start-ups can also provide services to the bigger corporations. By the very nature of being small, they can come up with more innovative and cost effective ways to solve problems. Selling these problem-solving measures to larger companies ties them together and allows SMEs to grow alongside the larger.

As Ireland gains a name as a tech haven, it becomes an integral cornerstone of the Irish economy. Whilst the existence of globally recognised tech companies in Ireland might seem intimidating to your smaller start up, the reality for you and your company is that larger companies need smaller companies in order to thrive. Larger corporations need start-ups to either provide services or come up with innovative and cost effective products which increases competition and in turn increases the worth of the products themselves, creating a more valuable economy of tech in Ireland.

PEER-TO-PEER LENDING

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The economic downturn has caused insecurity in many job sectors. Perhaps one of the most worrisome aspects for new start-ups is the issue of funding. When there is very little funding available, where can SMEs turn? Recent discussions have opened up the topic of peer-to-peer lending as being a viable option.

 

In 2014’s ‘Action Plan for Jobs’, the Government set out a plan for providing alternatives sources of funding for Small and Medium Enterprises. In this plan, it was suggested that peer-to-peer lending “can be a valuable source of funding to micro and small businesses, either as a complement to traditional bank funding or as an alternative to this funding channel in instances where the application for bank credit has been refused.”

 

The peer-to-peer lending model is the process of lending money to peers without going through an intermediary such as a bank or building society. These loans are generally made to the individual rather than the company at large. One of Ireland’s best-known peer-to-peer lenders is Linked Finance, which allows lenders to bid on loan requests in order to finance or partially finance the business.

 

As the economy begins to find its feet again and grow companies of all sizes begin to focus on their investment options and often find that traditional lending models are too slow for their needs. In cases such as this, the peer-to-peer lending model may seem like the ideal option. This period of growing global stability has seen a massive explosion of so-called ‘crowd-funding’ platforms such as Kickstarter. Kickstarter allows for individuals to ‘invest’ in a company or product whilst receiving either a small share or a reward in return. The company or individual in person then effectively sees their product or event funded by peers without having to approach a bank or financial institution.

 

In the Government’s action plan, they suggest that peer-to-peer lending can compliment or in some cases replace traditional lending models. In the current markets when trust in the larger banks is at somewhat of a low, the tides may be turning from the days when the majority of lending options were bank-led.

 

In the UK, peer-to-peer lending already makes up a large portion of support for small companies. With the government now planning new methods of support, Irish SMEs might find that in the future peer-to-peer lending may make up a portion if not the majority of their financing plan.

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ULSTER BANK LOAN REFINANCING

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The final loan sale for the parent of Ulster Bank RBS (Royal Bank of Scotland) is due to be completed in September 2015. The final sale of the ‘Project Aran’ non-performing loan portfolio to Cerberus in December 2014 saw the disposal of the loan book relating to property borrowings. The focus has now shifted to the Small and Medium Enterprise (SME) lending book.

 

Following on from this, Ulster Bank have now agreed to allow borrowers apply to refinance existing debts through a third party bank. The hope is that all offers would be submitted by February 28th 2015 with full financing to be completed by March 31st 2015.

 

So what does this mean for you should you wish to pursue this option?

 

With such a tight timeline we would advise that all borrowers should be swift and thorough in compiling and submitting their documentation. Ensure ahead of time that all of your documentation is present and correct and that all points and requests are backed up with the valid paperwork. It might seem like an obvious request but even the smallest omission can cost you valuable time. With such a short period of submission, there is unlikely to be time allocated for re-submission.

 

Bank of Ireland are said to be gearing up to refinance a high volume of Small Business Loans from Ulster bank ahead of this portfolio sale, in a move similar to that which occurred with the Government Credit Guarantee scheme, which has been extended to cover business whose lenders are/were leaving the Irish Market. This scheme was originally only available to new loans but the decision was made to open it up for refinancing options with the move of Danske bank among others out of the country.

 

The issue for borrowers hoping to opt in to this refinancing offer of Ulster Banks is of course in the short timeframe allotted for submission so organisation is key and, as always DCA Accountants are here for you should you require assistance.