Irish family businesses concern about state's tax system outweighs Covid-19 and Brexit fears

Just 24% of respondents explicitly mentioned issues arising from Covid-19 as great concerns

Two-thirds of family businesses (63%) are very concerned about the impact of Brexit on logistics and supply chains. 

Ireland’s taxation system is the biggest concern for Ireland’s family-owned businesses, according to new research from the Family Business Network (FBN).

The research, undertaken by the Network and Smith & Williamson, provides new insights into the unique challenges facing family-owned enterprises, who collectively employ almost one million people across the country. Members of the network include high-profile Irish family businesses including Cork’s Musgrave family (Supervalu, Centra, Daybreak), the Campbell family (Bewleys) and the Roche family (Doyle Hotel Group).

Ireland’s “regressive” tax system was ranked as the number one concern of family businesses, with two-thirds of family businesses (63%) are very concerned about the impact of Brexit on logistics and supply chains. The cost of business insurance ranked the third greatest concern.

Just 24% of respondents explicitly mentioned issues arising from Covid-19 as being their current greatest concerns as business-owning families. Concerns included the government response to the pandemic, the changes it is causing to business practices and the virus’ wider impact on both the national and global economies.

The survey also found that family-owned firms are concerned about safeguarding their family values and their employment legacy within their local community.

82% of respondents have stated that support for next-generation family members is important to them with nearly half (48%) of the businesses surveyed seeking to prioritise professional training and mentorship. Many reported worry that the tax system for transferring family businesses from one generation to the next is a significant obstacle.

While half of family businesses feeling less confident about the current economic climate, the National Family Business Sentiment Survey also found that 58% of family businesses are likely to create new jobs within the next twelve months if there is “a supportive political and economic environment.” 

John McGrane, Executive Director, Family Business Network said: "Contributing 80% of Ireland’s economic value, indigenous Irish businesses are not only at the heart of today’s economy, but they will also drive Ireland’s economic recovery if the appropriate support is provided by Government."

John McGrane, Executive Director of the Family Business Network.

“The formulation of the National Economic Plan over the coming weeks offers a unique opportunity to centre Ireland’s recovery around the growth and development of indigenous Irish businesses. That vision can be achieved through a supportive taxation system and the establishment of a National Recovery Forum which would provide a space for family businesses, other employers, employees and Government to collectively agree how we shape Ireland’s future economy.”

Con Casey, Director and Family Business Lead, Smith & Williamson said many family businesses feel their contribution to the economy "is overlooked by the Government."

"Changes to Capital Acquisitions Tax and Capital Gains Tax as well as the reform of the insurance sector can help to ensure the survival and success of family firms as they navigate Brexit and COVID-19."