PwC Pre-Budget Submission for the Irish Private Business Sector calls for key tax and other support measures in strategic priority areas
PwC has published its 2022 Pre-Budget Submission for the Irish Private Business and SME sector ‘Recovery and Renewal - Supporting private business and SMEs in Budget 2022’. Developed in conjunction with the Family Business Network, the Submission focuses on new and innovative tax initiatives and other measures to support home-grown Irish private businesses through the next stage of Recovery and Renewal as the country emerges with a new sense of confidence and hope.
PwC says that the Government should be commended for the various supports that it has given to businesses from the very start of the pandemic, particularly in the sectors hardest hit including Ireland’s SMEs and private businesses. Despite concerns about new virus strains and the very recent further delay in the reopening of the hospitality sector, there is optimism that economic activity will bounce back. However, this will be unevenly spread with a growing fear amongst private businesses that the contingency funds and support measures will be largely exhausted as we head into 2022 and beyond. Therefore, particular attention will still be needed to continue to support our private businesses, employing some 45% of people working in Ireland. It would be very disappointing to see successful businesses fail just before they have had the chance to trade again. Now more than ever we need to continue to support businesses through a new stage of recovery and renewal.
Its 2022 Pre-Budget Submission sets out proposed measures to foster growth and create employment in the Irish Private Business and SME sector while restoring business confidence. The strategic priority areas targeted for support are: employment maintenance and business restoration; growth and investment; building a sustainable Ireland and business succession.
Key measures proposed include: Extending the EWSS to 30 June 2022; Waiving the TWSS and PUP clawbacks for employees in certain situations; Additional tax credits for people working at home; Increase the small benefits exemption by €1,000 for hospitality spend;Extending tax debt warehousing to end 2022; Reduce the interest rate on late payment of taxes; Relaxation of employers’ PRSI for new hires previously unemployed; Extending the 9% VAT rate for the hospitality sector to the end of 2023; ‘Super deduction’ until 31 December 2023 for plant and machinery (including IT equipment for remote working) and capital expenditure on buildings/factories that receive a recognised accreditation for overall energy performance; Accelerated tax write-offs for the development of regional hubs to create shared office spaces; Tax deductions on rent for landlords in certain situations; Temporary reduction in capital gains and capital acquisitions tax rates; Similar to the UK, facilitate the transfer of businesses to the next generation without incurring upfront punitive tax costs i.e. pay an ‘upfront instalment’ of the gift/inheritance tax with the balance being spread over a longer term period; Extending CGT exemption to early stage renewable energy projects to encourage release of assets to renewable developers and encourage the wider adoption of electric vehicles via a general scheme of tax incentives.
PwC says that succession planning and planning for future exit strategies are high on the agenda for many business owners and particularly at a time when many businesses need new energy and drive for growth post pandemic. However, a key challenge for Irish private and family businesses is the efficient and affordable transfer of business assets. The survival of many businesses in these highly uncertain times will be dependent on a successful transition of the business. The retention of these businesses by their Irish founders is important not only for the future growth of the domestic economy but also for many these businesses are central to the survival of the local and rural areas in which they are situated. The firm proposes a consultation process with relevant stakeholders and the Department of Finance to explore possible measures to facilitate a burdensome free transition to the next custodian. The full report is at www.pwc.ie