Complexity of company tax key concern for new businesses, poll finds

NEW research carried out by Red C shows that 77% of indigenous companies believe the highly complex nature of company tax is the biggest concern for start-up businesses.

A massive 93% of companies said that the fear of the financial cost of failure was the greatest deterrent to starting up a business in Ireland.

The poll was carried out on behalf of the Irish Taxation Institute.

The ITI Tax Week poll found that only 15% of SMEs in Ireland have considered or availed of the BES Scheme, with almost 60% believing it is too difficult to actually obtain funds through the scheme.

In the absence of bank and private lending to businesses, Ireland’s BES should also provide a means of investment for good Irish businesses with growth potential, according to the Institute.

The poll found that a reduction in the complexity and cost of securing funding would make the BES process a much more attractive option for investors.

ITI president Olivia Lynch called for the expansion of the range of business activities that would qualify for BES, to better reflect the modern economy.

“We need to be honest enough to recognise where improvement is needed and accept that we have some way to go if we are to create the sort of entrepreneurial culture that is required by one of the most export dependent countries in the world,” she added.

The sector would benefit significantly if the capital gains tax rate was halved to 12.5% for disposals of investments, where investment was made between 1 September 2010 and 31December 2011, she said.

Overall there was a growing need to take as much pain out of the tax system here so that businesses can get on with growing their businesses, said Lynch.

Britain in recent years launched a short tax return which is 4 pages long and can be used by the smallest of businesses with a turnover of less than stg£30,000 (€36,000).

By contrast our tax return for the self employed is now 24 pages long.