By Sean O’Reilly Manager DBASS Chartered Accountants
In Budget 2013 the Finance Minister, Michael Noonan introduced a Ten Point Tax Reform Plan to assist small and medium enterprises (SMEs) with their cash positions and creation of jobs.
In his speech, Mr Noonan acknowledged that the country’s large exporting sector was delivering strong growth but recognised that the operating environment in the domestic economy remains difficult, particularly for small and medium enterprises.
Here are the main measures announced in Michael Noonan’s budget speech that may affect your business:
Corporation Tax: The government remains committed to the retention of the 12.5% Corporation Tax which is important for the country’s multinational companies, such as Google, PayPal and Facebook, and attractiveness for Foreign Direct Investment.
Corporation Tax Relief: The Corporation Tax Relief for start-up companies will be amended to allow unused credits to be carried forward against profits in future years.
Tourism: In support of the Gathering 2013 initiative, the lower rate of VAT at 9% will remain which will be well received by small businesses in the tourism industry.
VAT: To help improve the cashflow position of SMEs, the government has increased the Cash Receipts threshold for VAT from €1 million to €1.25 million.
Fuel: The haulage industry will welcome the introduction of a rebate on diesel scheme from 1 July 2013 which will enable them to reduce their direct costs.
Motor Industry: A new Dual Registration Scheme will be launched in January 2013 which means we will see car registrations with the numbers 131, 132. It is thought that this will encourage people to buy cars throughout the year instead of a surge in demand at the start of the year.
Job Creation: In terms of job creation, Mr Noonan announced plans to launch a new initiative called ‘PlusOne’. This would replace the current Revenue Job Assist and Employer PRSI Incentive Schemes and is primarily aimed at encouraging employers to hire the long-term unemployed. The full details of this scheme have yet to be unveiled but if it is in line with previous schemes, it could mean a reduction in Employers PRSI.