‘Struggling’ small businesses not seeing recovery

The Government parties are “creating an illusion” of economic recovery which is not being experienced by indigenous small enterprise, according to a group of business owners in the west and midlands.

Running a small business ethically in Ireland is becoming increasingly difficult due to high costs, says the group's spokeswoman, Galway restaurateur Catherine O'Brien.

“This is creating a fundamental chasm in Irish society, where hard-working,creative, responsible and independent micro-enterprise is not rewarded,” says Ms O’Brien, who has been in the food business for 19 years.

At a recent discussion with fellow business owners based in the west and midlands, she described how stress had contributed to illness and suicide rates among people who had incurred debts which were “not large” in the overall scale.

Business owners, ranging from a boutique owner, a biochemist, a psychotherapist, a wholesale distributor and a former owner of a recruitment company shared similar experiences and stressed the difficulty of speaking publicly.

“You say anything and you have the Revenue Commissioners down on top of you,” one midlands company owner said, describing how her car had been repossessed by eight men, who said they were acting on behalf of a Revenue sheriff, after she was unable to keep up with tax payments.

“They may have been within their right, but if eight men came to my house at night for any other reason I would have called the gardaí,”she said, describing the experience as “very intimidating”.

Advice service

Individuals in difficulties can seek assistance from the Money Advice and Budgeting Service (MABS), but there needs to be an equivalent confidential and non-judgmental advice service for small businesses, the participants said.

They say after paying rents, rates, a range of taxes including VAT on gross profits, property tax, motor tax and PRSI, water and waste charges, energy costs, bank fees and staff wages, many small business owners cannot afford a salary and depend on cash flow for a living .

“Certain businesses, such as chains which came in at an opportune time when properties were available to buy or rent at a cheap price, are doing well,” one of the participants said.

They said many very established family businesses were “struggling”, while the Government’s “focus “ appeared to be on “big business”.

Former Galway mayor and Independent councillor Catherine Connolly, who is running in the general election, said she recalled similar issues being raised at public meetings before the 2011 general election. "If anything, it is now more critical."

Small Firms Association (SFA) director Patricia Callan said it was still a "very challenging environment" for a very important sector of the economy, with firms with less than 50 employees accounting for 44 per cent of employees and 49 per cent of total private sector employees.

Ending what it sees as “tax discrimination” against self-employed and entrepreneurs and reducing high business costs are among highlights of the SFA pre-election manifesto.

The Department of Jobs, Enterprise and Innovation cited a range of supports for small and medium enterprises (SMEs), including the Credit Review Office and the Strategic Banking Corporation of Ireland.

Enterprise Ireland and Local Enterprise Offices also offered assistance, the department said.

However, Ms O’Brien said in her experience the supports were mainly for manufacturing and export-oriented businesses.

Tax bills

The Revenue Commissioners said it initiated 37 liquidations and eight bankruptcies in 2014, and this “small number” reflected its aim to identify a “mutually acceptable solution” to unpaid tax bills. It said it could not allow a struggling business to stop paying taxes and still continue trading but its “clear preference” was to “engage” rather than to deploy debt collection/enforcement sanctions.

It said cases were only referred to the sheriff or external solicitor where the taxpayer had “not responded to, or engaged “ or where “discussions had failed”.

It said sheriffs were independently-appointed officers of the court, and had the legal right to seize goods but such seizures were a last resort and “rare” and advance notice was given.