ENTERPRISE:THE GOVERNMENT has proposed a significant revamp of the Business Expansion Scheme (BES) in a bid to stimulate employment growth among small and medium-sized businesses.
Subject to approval from the European Commission, it is to be renamed the Employment and Investment Incentive (EII) with the maximum amount that can be raised increased to €10 million from the current €2 million limit.
The maximum that can be raised by a company in a 12-month period will be increased to €2.5 million from €1.5 million.
These increases are intended to reduce dependence on loans and reduce costs for businesses.
The changes will also help companies operating in the green energy sector to obtain access to a greater level of funding so they can reach production stage.
The period that people must hold the investment has been reduced to three years from the current five. But the tax relief available is to be cut from 41 per cent to 30 per cent.
An additional 11 per cent relief will be available where it is shown that employment levels have increased at the company at the end of the holding period or where the company used the capital raised for expenditure on research and development. Certification is also to be simplified and it is proposed that the scheme will continue to run until 2013.
The proposed changes were welcomed yesterday by Isme, which represents small and medium-sized enterprises. Its chief executive Mark Fielding said: “A revamp has been long overdue and we are glad that they have decided to review and extend it.
“The focus of the new government has to be on employment growth. This will be some help towards that.”
A number of trading activities will not be eligible for the EII. These includes hotels, nursing homes, forestry, financial activities and land development. Coal, steel and shipbuilding businesses are also excluded.
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