New supports for SMEs announced by Government
Last week, The Small Firms Association has welcomed the Government’s new support package for small businesses. In particular, the SFA welcomes the increase the employer PRSI threshold from €441 to €496. The SFA did state its disappointment that the threshold change would not come into effect until the 1st of October.
This measure will ensure that employers with employees earning the weekly equivalent of the national minimum wage will pay the lower rate of employer PRSI rate of 8.8%. Additionally, the employer PRSI threshold will be explicitly considered as part of the Low Pay Commission deliberations and is reviewed on each occasion that the minimum wage is increased.
Key measures include:
- reopening the Increased Cost of Business (ICOB) Scheme for another 14 days
- introducing a second payment of ICOB for businesses in the retail and hospitality sectors
- doubling the Innovation Grant Scheme to €10,000
- increasing the maximum amount available under the Energy Efficiency Grant Scheme to €10,000 and reducing the business contribution rate from 50% to 25%
- widening the eligibility for the Trading Online Voucher, extending it to all sectors up to 50 employees, modernise eligible expenditure and doubling the grant to €5,000
- increasing the lending limit for Microfinance Ireland loans to €50,000 from €25,000
- widening the eligibility for the Digital for Business Consultancy Scheme and extending it to all sectors with up to 50 employees
- launching a new ‘Ireland’s Best Entrepreneur Programme’ to encourage entrepreneurship and startups in under-represented groups
- launching the new online National Enterprise Hub for SMEs to access information on the wide range of Government business supports
- implementing an enhanced ‘SME Test’ by the Department of Enterprise, Trade and Employment in conjunction with the Department of the Taoiseach
- review ESRI research on the impact of Statutory Sick Leave before deciding on any further increases
- review the proposed Roadmap for Increasing Minimum Annual Remuneration Thresholds for Employment Permits
- Utilising the €1.5bn surplus in the National Training Fund to future proof workforce skills in SMEs.
Further details here.
When launching the new measures, the Minister for Enterprise, Trade and Employment, Peter Burke TD said:
“Our small businesses are the backbone of our local economy and provide much valued employment in communities across the country. These measures represent agreement from across government on the need to support our SMEs in the face of rising costs – while also balancing critical progress in terms of working conditions.
“Small and medium sized businesses are vital to Ireland’s success and are central to our ability to build a broad-based and successful economy and wider society. It has been a priority of Taoiseach Simon Harris to support our small businesses since he took office, and I am glad today that we have delivered on this.”
In response to recent increases to the National Minimum Wage, the Department of Enterprise, Trade and Employment published a report in March which confirmed significant and cumulative increases facing the business community, with small businesses being less likely to absorb the current and incoming labour costs over the next two years.
Furthermore, in March PWC published its Insolvency Barometer which showed a 41% increase in insolvencies, with SMEs accounting for 85% of all business failures. According to the PWC report many restaurants have closed over recent months with hospitality having three times the equivalent business failure rate per 10,000 businesses compared to retail. Additionally, Deloitte Ireland’s Insolvency & Restructuring Statistics show that the corporate insolvencies increased by 47% in the first quarter of 2024 compared to the same period last year.
If you have any questions on Business Supports, please contact SFA Public Affairs Lead, Jonathan McDade - jonathan.mcdade@sfa.ie
