Noonan incentivises new business creation with €500 million tax relief package
Long-term jobless to get income tax exemption to become self-employed
A new Start Your Own Business (SYOB) scheme has been unveiled for people who have been unemployed for at least 15 months.
Minister for Finance Michael Noonan has announced a €500m Build Your Own Business package, including a suite of tax measures designed to tempt would-be small business owners and entrepreneurs to invest in a new company.
For people who have been unemployed for at least 15 months, the Minister has introduced a new Start Your Own Business (SYOB) scheme.
It comprises a two-year exemption from income tax for qualifying unemployed people who start an unincorporated business, which would include partnerships and sole traders.
The income tax exemption applies to incomes up to €40,000 annually. The measure is specificially designed to target unemployed construction workers who may wish to go out on their own, perhaps buoyed by other measures announced to stimulate house renovations and extensions, the Minister said.
The scheme is not restricted to any particular industry.
Separately, to encourage more substantial capital investment in new businesses by entrepreneurs, the Minister has announced a Capital Gains Tax (CGT) exemption for investors who invest gains raised on the disposal of assets into the creation of a new business.
An entrepreneur who has previously paid CGT on the disposal of an asset, and who subsequently reinvests this cash in a new business between 2014 and 2018, will be exempt from CGT on the sale of the new investment provided they hold on to it for at least three years.
With debt financing for new businesses still being restricted by the banks, the measure is designed to free up fresh equity financing for new “productive, trading” businesses.
Mr Noonan also announced an extension of the tax reliefs available for research and development activities, also known as the R&D tax credit.
He said the tax measures, along with a new information campaign to highlight state enterprise supports and a new mentoring scheme for small businesses, are aimed at addressing the relatively low level of nbew business creation in the budget. He referred to the fact that newbusiness creation in Ireland is lower than the EU and OECD average.
“Too many people see themselves as employees for life,” said Mr Noonan.