The First Time Ever you saw your Own Home
We have spoken many times in the past about the ongoing increase in house prices and the ways that these rises combined with stricter mortgage rules have begun to effectively squeeze many first time buyers out of the market. Similarly, the rapid increase of rental costs has dampened many prospective buyers hopes as these costs make it increasingly difficult to get a deposit together. In recent years it has become very difficult to be a hopeful first time buyer, but it seems that there might be a blink of hope on the horizon for prospective buyers on lower incomes.
It was announced this week that the Government has set aside €200m to fund a new scheme entitled the Affordable Mortgage Scheme to offer relief to first time buyers on lower incomes. The scheme will see local councils offer mortgages at lower interest rates than the majority of lending banks and crucially, will be fixed for the duration of the loan. This is said to save buyers up to €10,000 over the duration of their mortgage. The scheme is set for a relatively immediate start, with a start date of February 1st and is sure to offer some hope for lower income buyers.
Interestingly, the scheme’s loan can be used for second –hand as well as new properties, and to build your own home. This is a departure from all other recent schemes which were available only to new homes, and did not apply to building your own home. Previously, there was a local authority mortgage scheme in place for those who had been previously turned down, but this was offered at a variable interest rate and did not offer the long term savings that the Affordable Mortgage Scheme promises.
Under this scheme first time buyers will have access to loans of up to €288,000 at a fixed interest rate of 2.25% for 30 years. This offers first time buyers the security of knowing their repayments for the duration of their mortgage. Minister for Housing Eoghan Murphy has said of the scheme:
“What this means essentially is that a person or couple can purchase a home, while ensuring that they can still keep their monthly repayments to one-third of their net disposable income – with no risk of their mortgage rate rising and so no threat to their ability to afford repayments, giving them certainty and security.”
The loan will be subject to the same lending rules as the banks, in that buyers will require a 10% deposit on the property. Buyers will need to have evidence of being turned down by two lenders and there is also an income cap of €50,000 per year for single buyers and €75,000 per year for joint buyers. There will also be a limit on the overall price of the home as in the Greater Dublin, Cork and Galway areas the maximum market value of the property cannot exceed €320,000 whilst elsewhere in the country this limit will be €250,000.
Should you require any guidance on any financial or business matters, please do not hesitate to contact us here at EcovisDCA, where we will be happy to assist.
– – –
~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY
Finance options in wake of Brexit
/in DCA News & Views /by ecovis_adm1n_17Here at EcovisDCA our focus is always firmly on making life and business simpler for our clients and friends. We want you and your business to be a success just as you do and that all important work: life balance can sometimes only be achieved through the acceptance of a helping hand when in need. We have often spoken about funding options and opportunities available in order to either get your business off the ground or plan for an expansion and today we will be discussing a financing option with a twist: Growcap Finance.
Brexit is a word that has faded away into the middle distance somewhat in recent months after the term exploded into our general usage not too long ago. With Britain’s planned exit from the European Union still very much on the cards there is still some cause for concern for Irish businesses who may rely on foreign export or have had dealings with the UK. When engaging in global trade, one of the downsides for many business is the inevitable dealings with customs and VAT. Whilst many people sourcing goods may now look as far afield as China due to a newly improved quality of product, and lower pricing, there is always the issue of customs and VAT obligations when dealing outside the EU. It remains to be seen if Ireland will now face these issues in the future when dealing with goods from the UK once it is outside of the EU.
As a business owner it is your responsibility to ensure that any goods you have sourced from outside of the European Union get safely through the customs process and that the appropriate VAT is paid in full on entry. This can be quite a time consuming and painful process for business owners who have other issues to contend with as well as being an additional drain on vital cash flow to the business as VAT can add an extra 20 to 23% on to your existing payment. This is an issue especially for SMEs who may rely heavily on every penny of working capital available to them.
This is where Growcap Finance come in and can be of benefit to many businesses. Growcap Finance can assist you in funding your products sourced outside of the European Union, taking that additional headache away from you and freeing up some capital for your business. At present, Growcap can fund everything from the purchase price of the product to the logistics and VAT, while also ensuring that the product lives up to expectations before issuing payment. This may be an excellent option for businesses feeling the stress and headaches of dealing with VAT payments and shipments from outside the EU. It may also be a viable course of action in the event of a sudden Brexit.
Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.
– – –
~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY
The Importance of Financial Management
/in DCA News & Views /by ecovis_adm1n_17As our small island continues to recover from the economic crisis, all eyes are of course fixed on the future. One aspect that is often overlooked however, is the future generation of entrepreneurs, investors, business owners and workers currently in school who will be at the helm of Ireland’s business and financial fortune in future years. We are sure that we do not want the next generation to repeat the same mistakes as their predecessors, but it seems that we are overlooking the ways in which we can provide safety and reassurance that they will not.
Recent research carried out by Empathy Research on behalf of Aviva Life Insurance has shown that many individuals (approximately one third of people) are continuing to pay dearly for the mistakes of the past, without implementing any new fail safe techniques in place to prevent future issues. It seems that though we may have learned from past mistakes, we are unclear how to buffer against them in the future. This research for Aviva has found that over half of Irish people have in fact had no education in the area of financial management, and this is a tradition that is being carried on to the next generation. Ann O’Keefe of Aviva’s Retail Life Insurance has said of the findings that:
“Making smart decisions when it comes to personal finances can have a major impact on your life both in the short term and in the longer term. In Aviva, we believe there’s a strong argument to be made for personal finance to be taught in secondary schools to equip young people with the knowledge and tools they need to make the best financial decisions in their later lives.”
The study also found that women may be likely to be more cautious in investments and financial decisions whilst men are twice as likely to be motivated to invest or save by the need to ensure the financial security of loved ones in the event of illness etc. This findings show a grave lacking in financial education which could protect the next generation from making similar mistakes in the future, as well as showing a gap in the market for strong financial planning courses to be made available to the current generation to enable them to understand the past and plan for the future to ensure that we create a strong financial landscape together.
Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.
– – –
~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY
Entrepreneur Relief and Retirement Relief
/in DCA News & Views /by ecovis_adm1n_17Oh, the Relief!
It is an unfortunate fact of business life that at some point, your own interactions with your company must eventually come to an end. Whether or not you wish to wind your company down entirely, we have spoken in the past about the importance of having an exit strategy in place to ensure a problem-free transition during this time, but some may not know that there are a couple of relief options already in place in Ireland which may be of assistance during this time of major change. Entrepreneur Relief and Retirement Relief can in fact be used in conjunction with one another and may offer some much needed relief when exiting your business.
If the time has come for you to dispose of your business these options of tax relief might be of great benefit to you. In 2014 it was decided that a new relief aimed at entrepreneurs needed to be brought into effect as taxation issues had created a great many challenges for Irish entrepreneurs, who are the essential framework of Irish business life. Entrepreneur Relief offers tax relief to entrepreneurs at all stages of their lives to support the reinvestment of capital acquired from the disposal of business assets. Retirement Relief, on the other hand of course applies only to the retirement stage.
Entrepreneur Relief is especially beneficial to all entrepreneurs under retirement age as it offers a reduced rate of CGT (Capital Gains Tax) to entrepreneurs disposing of their business up to a limit of €1million. This relief reduces the tax rate to just 10% from 33%. Naturally, as with all relief options, some conditions are in place to restrict those who are eligible to apply. Your business must be a currently trading company and you must hold proof of active engagement with the company i.e. you must hold or have held at least 5% shares in the business or have spent at least 50% of your working time in the business over the previous three years.
Interestingly, Retirement Relief can be used on the same disposal as Entrepreneur Relief and applies to individuals over the age of 55. Again there are a number of qualifying conditions that apply here. The disposal must be made by an individual (not a company) aged 55 or over, the disposal must be of qualifying assets and the individual must have been a working director for a minimum of 10 years if the disposal is related to a family company. Retirement is not a requirement of this relief.
We would advise that anyone interested in either or both of these relief options look into them in great detail before organising an application in order to maximise the benefit to you and your business.
Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.
– – –
~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY
Long Term Job Creation & Retention For Your Business
/in DCA News & Views /by ecovis_adm1n_17EII EII, Captain
Job creation and retention has long been a top priority for Irish Business. Following the economic downturn, jobs were no longer a guarantee, rather they became somewhat of a luxury for a time as the job market became increasingly competitive and there were fewer jobs available as companies struggled to maintain their existing employee ratios. Incentives like the JobBridge scheme have been accused of exacerbating this issue, and exploiting workers, resulting in the dissolution of the programme. One programme which has greatly which has continued on through changes and changing times during Ireland’s continuing recovery is the Employment and Investment Incentive (EII) scheme.
The EII Scheme is a tax relief incentive which was previously under the name Business Expansion Scheme. The scheme provides income tax relief to Qualifying Investors for investments in qualifying Small and Medium Enterprises (SMEs) and is one of very few remaining schemes to do so. The Finance Act of 2015 introduced a number of changes to the scheme including new requirements for qualifying companies, which all will now be aware of. There were also some more recent changes made which not all interested companies may yet be aware of.
As part of the Finance Bill 2017, Minister for Finance, Public Expenditure and Reform, Paschal Donohue announced significant changes to be made to the scheme. This followed on from revelations that the EII was not functioning in accordance with sections of the European Commission General Block Exemption Regulations which state that all finance aid schemes considered as risk level should be restricted to independent private investors only and cannot provide relief to those with any close connections to the business. This new amendment will be a major change for interested parties as well as those who have availed of the scheme in the past as from this point on as it will now eliminate all parties apart from private independent investors. Those investors with any connections including any shares owned by them or their associates, family members, partners or descendants are also exempt from participation.
This announcement saw these changes come into effect on November 2nd 2017 and were seen by the Minister as being a correction to an inherent error within the scheme and there is to be a review of the scheme in full in the first half of this year so that any further changes can be brought forward into Budget 2019.
Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.
– – –
~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY
Local Enterprise Offices Support For SME’s
/in DCA News & Views /by ecovis_adm1n_17As discussed last week, the general outlook in Ireland for start-ups and SMEs (Small and Medium Enterprises) has begun to brighten considerably in recent years with the addition of new funding options and the acceptance of these forms of businesses as being a large and important part of Irish business in the modern age.
This week, it was revealed that start-ups and small businesses have also begun to form a large part of the Irish employment recovery as it was revealed that 3,700 jobs were created last year by these types of businesses, backed by their LEOs (Local Enterprise Offices). These offices are seldom the focus of much spotlight, but are often the key to getting a small business off the ground and keeping it running.
Local Enterprise Offices are run by Enterprise Ireland and specialise in assisting these vital small businesses in Ireland in a multitude of ways, from offering advice, information and guidance to creating a calendar of important news, publications and events for these business owners to be aware of. This provision is of vital importance to these smaller companies which may not otherwise find the support they so badly need to get off the ground. Minister for Trade Pat Breen has been quoted as saying of the offices:
“In a challenging environment, LEO clients have contributed substantially to economic development up and down the country, especially outside of the main urban centres.”
There are 31 LEO nationwide, each providing a wealth of essential services to the start-ups and SMEs in the locality. It was also reported that more than 80 small businesses progressed from LEOs into the Enterprise Ireland portfolio in 2017, meaning that these businesses crossed the threshold into viable businesses with the assistance of their LEOs.
Things appear to be looking up for small businesses in Ireland, and with the support of vital structures like the LEOs we may see a great many more new start-ups and SMEs get their big break on Irish soil.
Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.
– – –
~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY
SME’s The Backbone Of The Irish Economy
/in DCA News & Views /by ecovis_adm1n_17Let’s hear it for the Little Guy
As you all know, we here at EcovisDCA are big supporters of small businesses, new start-ups and SMEs (Small and Medium Enterprises) and we have spoken many times in the past about new and interesting funding opportunities becoming available for these kinds of businesses. We have also spoken in the past about the way in which SMEs can be said to form the backbone of the Irish business world as in reality they form over half of all Irish Businesses. The shows the absolute vital importance of keeping these types of enterprises up and running in Ireland.
This week there has been good news for Irish SMEs as figures compiled by business and credit risk analyst Vision-net show that 2017 was the best ever year for the formation of new start-ups in Ireland. This is not only good news for our business world, but it shows a new and growing level of confidence in doing business in Ireland which can only mean good things going forward for our small island with big dreams.
These figures showed that a total of 22,354 companies were set up in 2017, which is a marked increase on previous years which barely surpassed 20,000 in 2016, the first time these figures have been seen since the late 90’s. Managing Director of Vision-net, Christine Cullen has been quoted as saying that the results are a
“Clear sign of a buoyant economy. Despite the continued uncertainty surrounding Brexit and the Border, the national business community has remained productive and innovative. Ireland is an attractive place to set up and do business, for indigenous and foreign companies alike”.
Unsurprisingly, Dublin was the strongest county for new start-ups, with professional services and finance businesses compiling the greatest share of these new businesses. It was also found that the construction industry continues its ongoing recovery and that there is a burgeoning sense of confidence in these industries that was previously unseen. This means that there is money being leant into these businesses which was not available to them before.
As always, it is important not to let good news let us become complacent, as Cullen states:
“There are important factors to consider. As Ireland approaches full employment, it’s likely that the impressive year-on-year growth that we have seen since the end of the recession will slow. Brexit, too, remains a largely unknown quantity. Its effects on the economy will likely not be felt for several years”.
Whilst this shows positive movement, we do of course have further to go and as always we here at EcovisDCA are always available to help with any new business or finance queries you may have. Please don’t hesitate to get in touch.
– – –
~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY
Salaries On The Rise
/in DCA News & Views /by ecovis_adm1n_17More Money, More Problems?
As January draws to a close and we emerge bleary eyed from the post-Christmas slump things start to cheer up. The days start to get brighter for longer and we are no longer coming and going from work in total darkness. The sun begins to warm up for spring and we start to slow down our bemoaning to our colleagues the absolute length of January and we cast an eye towards booking our summer holidays. With this casting off of the darkness of January, we all like to receive a bit of hopeful news and this week there has been talk of some wallet-bulking changes.
It was reported this week as part of Bank of Ireland’s monthly Economic Pulse survey that almost half of workers can expect a pay rise this year as employers begin to make more plans to increase wages. This follows on from the findings that firms in all disciplines have heightened expectations for January’s business activity. Data from January shows that 44% of business owners are planning to increase employee wages this year, which is an increase of 7% from last year. It is believed that this is reflective of both the increase in minimum wage and a tightening of the labour market over the past 12 months.
Chief Economist with Bank of Ireland Dr. Loretta O’Sullivan has stated that
“The mood was positive this month […] the economy is doing well and public finances remain on track […] the Economic Pulse started the new year on a positive note, with consumer confidence posting a two-year high and business sentiment up on December’s reading. While some of the improvement this month is due to seasonal effects, the Budget changes to social welfare payments and income taxes lined pockets in January, as did the rise in the national minimum wage, which helped lift the mood”
This is of course a very positive note on which to begin the New Year as the post-Christmas sales also increased consumer confidence as almost half of consumers have stated that post-Christmas was the perfect time to make major purchases for the home like electrical goods or furniture. It was also found that despite rising house prices eliminating many from the market, over 30% of existing homeowners are planning on spending large sums of money on home improvements in 2018.
Bank of Ireland have stated that despite these positives, it is important that businesses not become complacent particularly in the unknown field that Brexit presents.
Should you require any further guidance please do not hesitate to get in touch with us here at EcovisDCA where we will be happy to assist you in starting 2018 on the right foot.
– – –
~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY
The Links that make the Chain
/in DCA News & Views /by ecovis_adm1n_17Funding is something which is often at the forefront of every business owners mind. Whether yours is a large fully functioning company in need of some modernisation or upgrading or you are just starting out as an SME (Small or Medium Enterprise) and you require that extra financial push to get your fledgling business to leave the nest, finance is an essential part of business life. We would all like to think of ourselves as fully independent and to think of our business as being our baby, belonging only to us, but no company is an island and no company can exist and thrive in a vacuum, particularly during difficult financial times so seeking finance is often an ideal way to give your company an essential push to either get off the ground, or gain new ground for an existing company.
Recently, we have focused primarily on SMEs and we have discussed the newly widening availability of funding for these companies during Ireland’s continued recovery. Where in the past funding was a commodity in scarce supply, now there are more options available to choose from. This is welcome news for all business owners as gaining access to credit may be the ideal method to prevent your business from stagnating. Currently, many SMEs still struggle to gain finance and fail to realise the true potential of their business.
One new method of gaining funding comes from Linked Finance who pride themselves on connecting hard-working business owners with thousands of individual lenders, ordinary Irish people willing to lend to deserving companies who may otherwise not have the option of progressing. Linked Finance are happy to snip that tangle of red tape and reinvigorate P2P (Peer to Peer) lending to, in their own words
“Bring business lending back to basics; real people with savings lending to great local businesses at attractive interest rates.”
If bypassing the banks and gaining funding for your business through P2P lending sounds like something you could benefit then Linked Finance might be your first port of call. Providing approval for SME loans from €5000 to €250000 in just 8 hours, the process couldn’t be simpler. Your loan request will be auctioned to lenders and once approved by you, your funding can be processed within 48hours.
The requirements for Linked Finance are as follows:
Visit www.linkedfinance.com for more information.
Should you require any further guidance please do not hesitate to get in touch with us here at EcovisDCA where we will be happy to assist you in starting 2018 on the right foot.
– – –
~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY
PAYE Changes
/in DCA News & Views /by ecovis_adm1n_17Unfogging the Small Print
The new year period is a time of change each year and whilst so often many of our ‘New Year, New Me’ promises may not stick, there are certain changes in the financial field that are occurring this year that it would be easy to miss. As always, we want to keep you as fully informed as possible.
Until recently, some tax assessment was on what is known as the “earnings basis” and was calculated regardless of whether or not the income was paid to the individual during that assessment year. The PAYE system operates on what is known as the “receipts basis” as in the employer deducting tax from the income at the time of payment to employee. New changes to the Finance Act of 2017 will bring order to confusion and bring all in line with the PAYE system of operations, meaning that all assessments will be moved to the “receipts basis” of assessment.
Changes have been made to the PAYE (Pay As You Earn) system from January 1st 2018 that not everyone may be aware of. As of the beginning of this year, the statutory basis of assessment for most employment income is the actual amount of income received, thus placing the basis of assessment for Schedule E income in line with the operation of PAYE.
Further changes will be in effect from January 1st 2019 including a further modernisation of the PAYE system. From next year, employers will be required to report relevant payroll data to Revenue no later than the date of payment to the employee. There will then be an automatic end of year review carried out on all PAYE customers for the year 2019 and subsequent years.
There are a number of exclusions to the receipts basis who will not see this change, proprietary directors will not be required to make this move, and where there is a PAYE exclusion order in place, no changes will occur. The changes will be required of all other employers and employees.
It is hoped that these moves will have a minimal or non-existent effect on employers, who will still be required to make the deductions when payments are made using the PAYE system. Similarly, this move should also not affect employee wages. As we have discussed in the past, Revenue are eager to clamp down on outstanding tax issues, and are now making the positive move to bring everything in line on a statutory basis and bring parity where there was confusion.
For further information, we advise reading through the recently published Tax and Duty Manual Part 05-01-08 found at the Revenue website at your leisure.
Should you require any further guidance please do not hesitate to get in touch with us here at EcovisDCA where we will be happy to assist you in starting 2018 on the right foot.
– – –
~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY
The Affordable Mortgage Scheme
/in DCA News & Views /by ecovis_adm1n_17The First Time Ever you saw your Own Home
We have spoken many times in the past about the ongoing increase in house prices and the ways that these rises combined with stricter mortgage rules have begun to effectively squeeze many first time buyers out of the market. Similarly, the rapid increase of rental costs has dampened many prospective buyers hopes as these costs make it increasingly difficult to get a deposit together. In recent years it has become very difficult to be a hopeful first time buyer, but it seems that there might be a blink of hope on the horizon for prospective buyers on lower incomes.
It was announced this week that the Government has set aside €200m to fund a new scheme entitled the Affordable Mortgage Scheme to offer relief to first time buyers on lower incomes. The scheme will see local councils offer mortgages at lower interest rates than the majority of lending banks and crucially, will be fixed for the duration of the loan. This is said to save buyers up to €10,000 over the duration of their mortgage. The scheme is set for a relatively immediate start, with a start date of February 1st and is sure to offer some hope for lower income buyers.
Interestingly, the scheme’s loan can be used for second –hand as well as new properties, and to build your own home. This is a departure from all other recent schemes which were available only to new homes, and did not apply to building your own home. Previously, there was a local authority mortgage scheme in place for those who had been previously turned down, but this was offered at a variable interest rate and did not offer the long term savings that the Affordable Mortgage Scheme promises.
Under this scheme first time buyers will have access to loans of up to €288,000 at a fixed interest rate of 2.25% for 30 years. This offers first time buyers the security of knowing their repayments for the duration of their mortgage. Minister for Housing Eoghan Murphy has said of the scheme:
“What this means essentially is that a person or couple can purchase a home, while ensuring that they can still keep their monthly repayments to one-third of their net disposable income – with no risk of their mortgage rate rising and so no threat to their ability to afford repayments, giving them certainty and security.”
The loan will be subject to the same lending rules as the banks, in that buyers will require a 10% deposit on the property. Buyers will need to have evidence of being turned down by two lenders and there is also an income cap of €50,000 per year for single buyers and €75,000 per year for joint buyers. There will also be a limit on the overall price of the home as in the Greater Dublin, Cork and Galway areas the maximum market value of the property cannot exceed €320,000 whilst elsewhere in the country this limit will be €250,000.
Should you require any guidance on any financial or business matters, please do not hesitate to contact us here at EcovisDCA, where we will be happy to assist.
– – –
~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY