BUDGET 2016: WHAT DOES IT MEAN FOR SME’S AND THE SELF-EMPLOYED?
It has been reported that SME’s now account for an enormous portion of all enterprise in Ireland. Unfortunately, SME’s and the self-employed rarely see their efforts being rewarded in any way when the time of the budget rolls around each year. Was the budget for 2016 any different? We have compiled some of the main changes that will affect both SME’s and the self-employed for your reference.
Self Employed Tax Credit
It was announced in Budget 2016 that there would be a new earned income tax credit of €550 available for those who are self-employed, including farmers. Whilst this is still quite far behind the tax credits available to others, it is somewhat of a beginning for the process of not alienating the self-employed through taxation. It is suggested that this figure would be increased in future years.
Capital Gains Tax Reduction
There will also be a very welcome reduction in the Capital Gains Tax for 2016 for the self-employed and entrepreneurs. This reduction takes the tax from 33% to 20% on a gain up to €1 million, which could have significant positive consequences, despite still remaining quite far behind the UK and the North of Ireland in relation to this tax. The expenditure cap for Film Relief has also been increased to €70 million which is good news for this sector.
Farming in particular was a sector which was more acknowledged in this budget than previous, as the general stock relief and the stamp duty exemption for young farmers was extended to 2018. It was also announced that a new succession transfer proposal would be put forward in order to increase certainty for the next generation of farmers and assist with a more long-term thinking that may not have been possible previously.
Another sector of self-employment and SME’s that was newly acknowledged in Budget 2016 was the increasingly popular microbreweries. The excise relief for microbreweries will now be made available upfront. This is welcome news for the industry as it may help to free up some much needed cash flow which is always important for these SME’s.
It is also hoped that the reintroduction of the Social Welfare Christmas Bonus of 75% will boost sales and income for SME’s, thus generating more revenue overall.
Unfortunately there have been few steps taken to support entrepreneurs in particular. Whilst these measures for the self-employed and SME’s in particular are small steps, at least these steps are finally being taken in the right direction and we would hope to see an end to the previous discrimination against these sector in future budgets, as SME’s begin to form the backbone of our modern economy.