In its pre-Budget submission. PwC has urged finance minister Paschal Donohoe to support family businesses, “the backbone of our economy”. 

The policy ideas, developed in conjunction with the Family Business Network, focuses on employment supports, growth and investment, building a sustainable Ireland and business succession, plus transition and other priorities. 

Tax partner Colm O’Callaghan (pictured) said: “While there are many priorities, it is really important that the government specifically focuses on helping the private business sector in the Budget. Irish private businesses are critically important to our economy and these firms need to have the capacity not only to support their employees with inflationary pressures but also to have sustainable and competitive businesses into the future.

“Being competitive is critical, and measures in the Budget that enhance  Ireland’s attractiveness as a location for private investment, from a corporate and an individual perspective, would be very welcome.”

PwC and the Family Business network suggest:

In Association with

• Increase tax bands and credits as well as travel and subsistence rates to be at least in line with current inflation
• Reduce employers' PRSI so that businesses can partially offset increased salary costs
• Introduce incentives in the form of reduced tax costs for employers to let properties to their staff
• Improve the share based incentives to make them fit for purpose for private businesses
• Reduce interest on late payment of tax across all tax heads to 3% (currently 8%/10%).
• Reduce the standard rate of VAT from 23% to 21%
• Extend the 9% VAT rate for the hospitality sector to 31 December 2024. 
• Introduction of capital allowances for remote working along with improvements to the Employment Investment Incentive Scheme scheme and the R&D tax credit regime. 
• A reduction of the Capital Gains Tax rate on non-property investments from the current rate of 33% to 20% to support investment by private businesses and entrepreneurs into private businesses
• Measures to incentivise both private individuals and the private business  sector to invest in green properties. For example, introduce additional ‘green’ tax reliefs in respect of CGT liabilities arising on the disposal of properties that have been retrofitted
• Introduction of tax reliefs and incentives in the renewable energy space to encourage investment in this area
• Raise the Capital Acquisitions Tax Band A threshold (including all gifts and inheritances from parents to their children) to €500,000 from €335,000
• Introduce mechanisms to facilitate the transfer of businesses to the next generation without incurring upfront punitive tax costs e.g. an ‘upfront instalment’ of the gift/inheritance tax applying with any balance of tax being spread over a longer period of at least 10 years
• Amend the revised Entrepreneur Relief whereby dividends would fall within the remit of being taxed at 10%. 

On sustainability, PwC says that more information and support will be needed on a continuous basis to aid the SME sector in managing the transition. Measures to ensure this should include:

• Funding and support from government to future proof-businesses and to encourage investment in business which supports the green economy
• Introduction of an additional corporation tax deduction for staff costs where the employees have been hired to support the business’s sustainability agenda or where selected employees are completing an upskilling programme that contributes to the green economy
• Reintroduction of the relief for investment in renewable energy generation, which ceased in 2014, in order to encourage corporate investment
• Introduce measures to encourage a market for second hand electric vehicles by way of tax incentives.