Small firms 'kept in dark' over €250m inflation budget aid plan

Enterprise Minister Simon Coveney told reporters that small firms will automatically benefit up to maximum of €10,000 a year via their local authorities, if they pay commercial rates of up to €20,000 a year.

The Government will have to make up for lost time and provide details of a proposed €250m aid package designed to protect small firms from the worst of the inflation crisis, business advisers and groups have warned.

It comes amid disappointment that the announcement of the centre-piece of the business budget was short of detail.

In their budget speeches, Finance Minister Michael McGrath said the Government would deliver help to indigenous firms and Expenditure Minister Paschal confirmed a €250m in “temporary supports” was being prepared “to support businesses through current challenges associated with cost-of-living pressures”.

Speaking later, Enterprise Minister Simon Coveney told reporters that small firms will automatically benefit up to maximum of €10,000 a year via their local authorities, if they pay commercial rates of up to €20,000 a year.

Mr Coveney acknowledged that local authorities would still be free to increase commercial rates and that plans were still being made for the introduction of the scheme.

But Vintners Federation of Ireland chief executive Pat Crotty said publicans need to know what the aid package entails, as businesses face escalating energy bills, increased insurance costs, and now a 10% rise in labour costs from the increase in the minimum wage.

“It’s extraordinary that details of a €250m package for businesses are unavailable on budget day, with the result that our members remain completely in the dark,” Mr Crotty said.

Chartered Accountants Ireland director of public policy Brian Keegan said businesses know about the costs they face, “rather than on any particular benefits flowing out of the budget statement”.

Isme chief executive Neil McDonnell said the proposed relief designed to benefit 130,000 businesses will likely not be available for some firms.

Business advisory firm Azets Ireland’s chief executive Neil Hughes said: “I think we have to pause and look at the detail. It’s a very significant amount.

“But we’re not going to welcome it if SMEs can’t access it and access it quickly.”

Cork Chamber said the €250m package would go some way to cushion the effects of increased costs and inflation but cautioned that that “more will be required”.

Mr McGrath also announced plans for Revenue to review processes for levying Vat invoicing on businesses and for the Department of Finance to review share-based incentives.

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He also announced a series of tax changes aimed at encouraging investors to fund Irish start-ups.

The finance minister plans a new relief for [capital gains tax] for “angel” investors at a cost to the exchequer of €55m and an increase in the age limit for capital gains tax retirement relief at a potential cost of €21m.

The tax credit for research and development will increase to 30% and the threshold to €50,000 at a total exchequer cost of €27m, and capital allowances for energy efficient equipment will also increase.

An increase in Vat registration thresholds will cost €6m, while a large increase in the section 481 film relief scheme is designed to boost productions, at a cost of €53m.

“Minister McGrath’s announcement of wide-ranging measures to support Irish innovation is to be welcomed,” said Roger Wallace at EY.

Economist Austin Hughes said the measures were “reasonably balanced”.

“I think there’s a decent cost-of-living budget were the public finances remain very healthy,” he said.