A leading technology investor has dismissed the Government’s new tax refund scheme for entrepreneurs as mere window dressing and called on the Coalition to introduce concrete measures to support start-ups in Ireland.
Ian Lucey is the founder and chief executive of cloud computing and web development firm Lucey Technology and someone who has invested in more than 40 companies over the past three years through the Lucey Fund.
He said the StartUP Refunds for Entrepreneurs (SURE) initiative, which was launched amidst great fanfare yesterday, was little more than an attempt by the Government to roll back on mistakes they had made.
SURE allows individuals to obtain a refund from the Government of up to 41 per cent of the capital they invest in establishing their own company over a six-year period.
The new programme is targeted particularly at individuals in PAYE employment, the unemployed and retired people and replaces the much criticised Seed Capital Scheme.
While business groups such as Chambers Ireland welcomed the introduction of the scheme, Mr Lucey said that it was a carbon copy of similar initiatives which had been launched in the past.
“The scheme is exactly the same as ones that existed before except that the Government previously dropped the period in which entrepreneurs could get a tax refund from six years to four years,” he said.
“All the Government done here is an about turn. They have reversed the changes they made a few years ago but outside of that it’s the exact same scheme. The amount claimed by applicants fell by a third when that initial change was made because it became less attractive.
“This is why they’ve upped it again and simply given the programme a new name,” he added.
Mr Lucey said that investors in the UK received an 84 per cent refund on capital spend rather than a 41 per cent one, making it more compelling to go to across the border to Newry to set up a company.
He said the Government had also made things difficult for would-be entrepreneurs by only allowing them to receive a rebate for research and development spend over three years, compared to three weeks in the UK. He said: “Start-ups and SMEs that are incredibly lean and innovative can’t afford to wait three years for this support.”
While Mr Lucey was dismissive of the SURE scheme, Chambers Ireland welcomed the initiative with its chief executive Ian Talbot saying the revamped scheme had great potential to encourage new start-up businesses.
“Entrepreneurs are the backbone of our economy and this scheme is a step in the right direction towards fostering a culture of entrepreneurship in Ireland,” he said.
“The scheme itself is simpler and more broadly applicable than its predecessor and incentivises a wide range of people to start up a business including those recently made redundant. This country needs more job creating entrepreneurs and this scheme will be of great benefit for those looking to start their own business,” Mr Talbot added.