What to know from Budget 2023

September 27, 2022

This afternoon Ministers Pascal Donohoe and Michael McGrath announced the details for Budget 2023. In the main this budget has been dubbed by many as an energy budget with the new schemes to support the affordability challenges facing both businesses and households.

Business energy supports:

  1. Temporary Business Energy Support Scheme (TBESS), providing qualifying businesses with up to 40% of the increase in electricity or gas bills up to €10,000 per month. It will help small businesses most, but also medium and larger businesses. It will be administered by the Revenue Commissioners, backdated to September, and will run until at least February 2023.
  2.  A €200 million targeted Ukraine Enterprise Crisis Scheme to assist viable but vulnerable businesses in the manufacturing and internationally traded services sectors which are suffering the broader effects of the war in Ukraine as well as increasing energy costs. One strand of the scheme will provide up to €2 million in grant aid for energy intensive companies impacted by the exceptionally severe increases in gas and electricity costs. It will be administered through Enterprise Ireland, IDA and Údarás na Gaeltachta and eligible businesses must produce an energy efficiency plan which shows how they will get their energy costs down.
  3. To assist the wider business sector with liquidity and to invest in energy efficiency, we’re introducing a €1.2 billion State-backed Ukraine Credit Guarantee Scheme. This will provide low-cost working capital to SMEs, primary producers and small mid-caps (businesses with fewer than 500 employees) of up to €1 million, on a six-year term, with no collateral required for loans up to €250,000.
  4.  €4 million in funding to the Local Enterprise Office network to include a new grant for microenterprises for energy efficiency. The Small Firms Investment in Energy Efficiency Scheme will provide a grant to companies to encourage capital investment in projects to reduce carbon emissions.  

The cost of doing business is getting ever more prohibitive for small businesses, with previously announced policies such as the right to request remote work, statutory sick pay, pension auto enrolment and including today’s budget announcement of an 80-cent increase in the National Minimum Wage. Small businesses are the forefront of job creation and economic activity in Ireland and are facing ever increasing costs, that will make it harder to retain and expand jobs.

The tourism and hospitality sectors are highly important for small firms and for the economy overall, it is very disappointing that the Government has decided not to extend the 9% VAT rate. No changes were announced on Capital Gains Tax and changes to the Key Employee Engagement Programme (KEEP) and other tax measures to support employment and retentions of staff. However, the Small Benefit Exemption was increased €500 to €1,000 and will permit two vouchers to be granted by an employer in a single year under this exemption. This change will apply in the current tax year, so that additional benefits can be paid this year if an employer wishes to do so.

There have been some increases in funding to apprenticeships and training schemes which will help some small businesses to upskill and retain their talent.

You can read the SFA response here and more about Budget 2023 here.