Budget 2013 – Ten point plan could spur on small businesses

An article by Patrick Sutton, Partner of  Okellysutton in the Sunday Business Post on the 9th December, 2012,

In his Budget, Minister Noonan announced a ten point tax reform plan to help small businesses. Of particular interest in the ten point plan are the following elements:

Outside the 10 point plan, the decision to introduce a rebate for hauliers from 1 July 2013 is also very welcome. It will be interesting to see how this works in practice.

Farmers play a very important role in the SME sector, and the Government should have gone further and scrapped the green diesel replacing it with a rebate system too.

The abolishing of the redundancy rebate will add extra labour costs and is very disappointing for SMEs. This will negatively affect those businesses already hardest hit. Minister Leo Varadkar advises me that it was either this or the introduction of business paying sick pay for all staff for up to three months. The government should exempt small businesses with less than 50 employees and reinstate the 60% rebate immediately.

There were also significant announcements in Budget 2013 in relation to the provision of additional funding support for businesses. It is envisaged that these will enable the delivery of a range of new and improved supports for companies in need of credit. The government is using scarce resources to leverage funding from the private sector to provide more credit for businesses.

Two of these measures deserve particular mention:

The Government will hope that funding and credit measures, along with the ten point tax reform plan, will help SMEs to improve their cash flow, help them access funding, boost demand for their products in new markets and incentivise them to create jobs.

The one worry is that the domestic market may not create the demand from the SME sector so that they may be able to create jobs and lead the recovery. Having said that, it is now up to the SME sector to pick up the gauntlet and show the government that its faith in them to lead the recovery is well founded.

Patrick Sutton, managing partner, O’KellySutton, Chartered Accountants, Tax Consultants and Business Advisors

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