Budget 2025: A Mixed Bag for Irish Businesses
October 2, 2024, 9:55 am
Location: United Kingdom, England, London
Employees: 11-50
Founded date: 2016
Total raised: $995.22K
Budget 2025 has landed, and the reactions are as varied as the colors in a painter's palette. The Irish Small and Medium Enterprises Association (ISME) and the Irish Venture Capital Association (IVCA) have both weighed in, but their perspectives diverge. One sees a silver lining; the other, a cloud.
ISME calls it a “not a business budget.” They see the government’s moves as politically motivated, aimed at winning votes rather than genuinely supporting the business landscape. Yet, they also recognize some positive steps. The €125 million increase in Personal, Employee, and Earned Income Credits is a nod to the working class. A reduction in the Universal Social Charge (USC) from 4% to 3% is another small victory. These changes are like a gentle breeze on a hot day—refreshing, but not enough to cool the heat of rising costs.
The ISME applauds the increase in the USC ceiling band. It rises from €20,484 to €27,382, a 34% jump. This change is a lifeline for many. However, the increase in the standard income tax rate cutoff from €42,000 to €44,000 means that those earning the average industrial wage of €50,000 will feel the pinch. They’ll be taxed at the marginal rate on €6,000 of their income. It’s like being offered a slice of cake, only to find it has a bitter aftertaste.
On the entrepreneurial front, ISME is more upbeat. The Employment Investment Incentive (EII) relief has been raised from €500,000 to €1 million. Start-Up Relief for Entrepreneurs has also seen a boost, climbing from €700,000 to €980,000. These measures are like fertilizer for a budding plant, providing the nutrients needed to grow. Capital Gains Tax relief for investors in innovative start-ups has tripled from €3 million to €10 million. This is a significant leap, encouraging investment in the future.
ISME also welcomes the changes to the Section 481 tax credit for film and television production. The proposed Capital Gains Tax on family businesses worth over €10 million has been “substantially watered down.” This decision is sensible, allowing family businesses to breathe a little easier.
On the other side of the coin, the IVCA paints a brighter picture. They describe Budget 2025 as “very positive” for Irish business. Their optimism stems from a massive investment in enterprise and employment. Over €1 billion is earmarked for the Department of Enterprise, Trade and Employment. This is a strong commitment to the enterprise sector, akin to a lighthouse guiding ships through a stormy sea.
The IVCA also highlights the increase in R&D credits. The limit has risen from €50,000 to €75,000. This change is a lifeline for early-stage, knowledge-intensive companies engaged in research and development. It’s like adding fuel to a fire, igniting innovation at a critical time.
The IVCA is particularly pleased with changes to Capital Gains Tax treatment for qualifying investments by angel investors. Doubling the Employment Investment Incentive Scheme (EIIS) relief is another feather in their cap. These measures will mobilize private capital for innovative SMEs. It’s a call to action, urging investors to take a leap of faith.
However, the IVCA also notes a missed opportunity. While they appreciate the budget's focus on future-proofing the economy, they believe more could be done to broaden the capital base of institutional investment. Increasing pension thresholds without encouraging institutional investors to channel funds into innovative companies is a gap in the strategy. It’s like having a toolbox but lacking the right tools to build something great.
As the dust settles on Budget 2025, the landscape for Irish businesses remains complex. The ISME and IVCA represent two sides of the same coin. One sees cautious optimism, while the other remains skeptical. The budget is a mix of sweet and sour, with some measures promising growth and others raising concerns.
The government’s challenge is to balance these interests. They must navigate the waters of public opinion while fostering a thriving business environment. The stakes are high. A robust economy is the backbone of a prosperous society.
In conclusion, Budget 2025 is a reflection of the times. It aims to address immediate needs while laying the groundwork for future growth. The reactions from ISME and IVCA highlight the delicate dance between politics and business. As Ireland moves forward, the focus must remain on creating an environment where innovation can flourish. The road ahead may be rocky, but with the right measures, it can lead to a brighter future for all.
ISME calls it a “not a business budget.” They see the government’s moves as politically motivated, aimed at winning votes rather than genuinely supporting the business landscape. Yet, they also recognize some positive steps. The €125 million increase in Personal, Employee, and Earned Income Credits is a nod to the working class. A reduction in the Universal Social Charge (USC) from 4% to 3% is another small victory. These changes are like a gentle breeze on a hot day—refreshing, but not enough to cool the heat of rising costs.
The ISME applauds the increase in the USC ceiling band. It rises from €20,484 to €27,382, a 34% jump. This change is a lifeline for many. However, the increase in the standard income tax rate cutoff from €42,000 to €44,000 means that those earning the average industrial wage of €50,000 will feel the pinch. They’ll be taxed at the marginal rate on €6,000 of their income. It’s like being offered a slice of cake, only to find it has a bitter aftertaste.
On the entrepreneurial front, ISME is more upbeat. The Employment Investment Incentive (EII) relief has been raised from €500,000 to €1 million. Start-Up Relief for Entrepreneurs has also seen a boost, climbing from €700,000 to €980,000. These measures are like fertilizer for a budding plant, providing the nutrients needed to grow. Capital Gains Tax relief for investors in innovative start-ups has tripled from €3 million to €10 million. This is a significant leap, encouraging investment in the future.
ISME also welcomes the changes to the Section 481 tax credit for film and television production. The proposed Capital Gains Tax on family businesses worth over €10 million has been “substantially watered down.” This decision is sensible, allowing family businesses to breathe a little easier.
On the other side of the coin, the IVCA paints a brighter picture. They describe Budget 2025 as “very positive” for Irish business. Their optimism stems from a massive investment in enterprise and employment. Over €1 billion is earmarked for the Department of Enterprise, Trade and Employment. This is a strong commitment to the enterprise sector, akin to a lighthouse guiding ships through a stormy sea.
The IVCA also highlights the increase in R&D credits. The limit has risen from €50,000 to €75,000. This change is a lifeline for early-stage, knowledge-intensive companies engaged in research and development. It’s like adding fuel to a fire, igniting innovation at a critical time.
The IVCA is particularly pleased with changes to Capital Gains Tax treatment for qualifying investments by angel investors. Doubling the Employment Investment Incentive Scheme (EIIS) relief is another feather in their cap. These measures will mobilize private capital for innovative SMEs. It’s a call to action, urging investors to take a leap of faith.
However, the IVCA also notes a missed opportunity. While they appreciate the budget's focus on future-proofing the economy, they believe more could be done to broaden the capital base of institutional investment. Increasing pension thresholds without encouraging institutional investors to channel funds into innovative companies is a gap in the strategy. It’s like having a toolbox but lacking the right tools to build something great.
As the dust settles on Budget 2025, the landscape for Irish businesses remains complex. The ISME and IVCA represent two sides of the same coin. One sees cautious optimism, while the other remains skeptical. The budget is a mix of sweet and sour, with some measures promising growth and others raising concerns.
The government’s challenge is to balance these interests. They must navigate the waters of public opinion while fostering a thriving business environment. The stakes are high. A robust economy is the backbone of a prosperous society.
In conclusion, Budget 2025 is a reflection of the times. It aims to address immediate needs while laying the groundwork for future growth. The reactions from ISME and IVCA highlight the delicate dance between politics and business. As Ireland moves forward, the focus must remain on creating an environment where innovation can flourish. The road ahead may be rocky, but with the right measures, it can lead to a brighter future for all.