Tackling systemic hurdles to the long-term economic health of Ireland’s SMEs will be a top priority for Chartered Accountants Ireland’s incoming President. Barry Doyle, Investment Director of MASV, takes up the office of President today following the Institute’s 136th AGM in Dublin, bringing considerable experience of advising and scaling successful businesses.
On the same day, Chartered Accountants Ireland has published a new thought leadership paper informed by the views of its 33,000 members, setting out the measures that it believes will achieve strategic, systemic improvements for SMEs operating across Ireland.
Chartered Accountants Ireland is the largest and longest-established professional accountancy body on the island of Ireland. Extensive engagement with members, two-thirds of whom work in business, over the last year has led to the publication of today’s paper, which sets out practical and progressive measures aimed at achieving sustainable, long-term progress.
Measures include:
- Further increases to the thresholds for Employer PRSI so all wages up to the minimum wage are exempt and wages up to the living wage are at the reduced rate of 8.8%.
- No extension to the Enhanced Reporting Requirements (ERR) for at least three years and not before an appropriate cost-benefit analysis of the current system has been completed.
- Reducing Capital Gains Tax (CGT) from 33% to 25% to stimulate business and personal transactions that will bring additional funds into the Exchequer.
- Wider SME eligibility for grants to include more ‘traditional’ industries and the service sector.
- A more prominent role for the Strategic Banking Corporation of Ireland (SBCI) in encouraging banks to provide low-cost credit to SMEs, and to underwrite this credit.
- New opportunities for Credit Unions to increase SME lending by adapting Central Bank regulations, e.g. lending limits.
Commenting, President of Chartered Accountants Ireland Barry Doyle said
“Record corporation tax receipts will not always be with us. There’s a strategic imperative to ensure economic health for SMEs long-term. This can only come from understanding the unique challenges facing them, not simply by virtue of their size, but also specific to the sector they operate in, and supports they need. Our members have first-hand experience of the cost and administrative burdens that SMEs are encountering, and the proposals we are publishing today are tailored to address these.
“The package announced this week by Government is a positive step, but we must ensure that a strategic lens is adopted in tackling what are stubborn, systemic hurdles. What we are publishing today is a blueprint that in the long-term will effect change if implemented. Further Government commitment yesterday to this sector in Budget 2025 is welcome, this is a commitment that will need to endure even as we move towards a new Government next year.”
The Institute’s proposals are grouped under four headings: resilience and growth, Government supports and funding, sources of business finance, and reducing the cost of business through the tax system. Among the proposed measures are:
Alleviating administrative and cost burdens for SMEs
- Further reducing an employer's PRSI bill by benchmarking the thresholds with the minimum and living wages:
- Weekly wages between €495.30 and €577.20 should be subject to the 8.8% rate of Employer PRSI, i.e. earnings between the minimum wage and living wage (which is suggested to be €14.80 per hour or €577.20 per week based on a 39-hour work week).
- Weekly wages above €577.20 are subject to full Employer PRSI.
- Enhancing the scope of Revised Entrepreneur Relief to encourage investment and growth and ending tax discrimination so that professional service companies can benefit from the various investment reliefs available to comparable trading companies.
- Removing the real time reporting requirement for enhanced reporting requirements (ERR) for employers – replacing it with monthly or annual returns. Additionally, we ask for a commitment from Government not to extend ERR for at least three years until the system is embedded and an appropriate cost-benefit analysis of the current system has been properly completed.
Commenting, Cróna Clohisey, Director of Public Affairs, Chartered Accountants Ireland said
“SMEs have faced an unprecedented number of new legislative requirements in recent months which significantly adds to their cost and administrative burden. In 2024 alone, the minimum wage has increased by 12% and additional sick leave entitlements have added 1% to payroll costs. From 1 October, the rate of Employer, Self-Employed and Employee PRSI will increase by 0.1%, while pensions auto-enrolment will add a further 1.5% in costs during 2025 as many employers will now be mandated to operate a second employee pension scheme alongside their existing staff pension plans.
“While the Debt Warehousing Scheme has mitigated part of these challenges for some businesses, Government needs to be cognisant of this challenge when implementing new labour regulations, having regard to the timing and suitability of these. An ‘SME Test’, as announced this week will perform most effectively if close engagement with business is built in from the outset.”
Improving access to business supports
Chartered Accountants Ireland believes that more resilient businesses will be better positioned to weather crises and uncertainty, and have confidence to invest, to scale, and to create employment. The Institute is calling on the Government to support SMEs in accessing finance, optimising governance structures, and investing in developing their workforces.
Proposed measures include:
- Widening the eligibility criteria for the broad range of grants available to include more ‘traditional’ industries and service sector.
- Ensuring more consistent availability of grants and supports nationwide. Our members tell us that services provided in one part of the country may not be available to similar businesses elsewhere; much depends on the approach and funding at a local level. With the advent of remote working, a common approach to supporting all small businesses, regardless of where they are located in Ireland is needed.
- Promoting healthy competition in the business lending market, by enhancing the role that community-based lenders and alternative lenders can play in addition to the pillar banks.
At today’s AGM, members of Chartered Accountants voted to approve the resolution amending the bye-laws to facilitate the amalgamation of CPA Ireland into Chartered Accountants Ireland, as was mandated by the members in February of this year. Chartered Accountants Ireland and CPA Ireland will continue working together to progress the amalgamation of the two Institutes.
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