Public Policy

Costs have increased for almost 80% of small Irish businesses in the past six months, with staff costs the biggest financial challenge faced by SMEs, according to the inaugural SME Business Sentiment Survey from Chartered Accountants Ireland and GRID Finance. The survey, which will be repeated every six months, will measure and track the experiences, confidence and sentiment of a range of SMEs, including small accounting practices, doing business in Ireland today.   Staff costs the biggest financial challenge  3 in 4 (77%) respondents say that business costs have increased in the past six months, with staff costs the biggest financial challenge facing 2 in 5 (37%). Small practices were particularly challenged by staff costs (cost of salaries and other benefits and compensations), with half citing it as their single biggest financial issue.  Operational costs (24%) and regulatory compliance costs (14%) were the other biggest financial challenges facing SMEs, ahead of working capital management and access to funding. 57% identified regulatory compliance as the area in which they most need government support (rising to 75% amongst small practice respondents).  Eoin Christian, CEO, GRID Finance said    "These findings align with our own research conducted earlier this year – rising costs, particularly staff-related expenses are creating significant pressure on Irish SMEs. While these challenges are real, they also represent an opportunity for SMEs to take stock, streamline operations and invest in smart, sustainable growth strategies. At GRID Finance, we continue to advise our clients to be proactive by forecasting future cash flow needs, exploring flexible funding options and staying ahead of regulatory requirements like auto-enrolment.      “We feel that it's vital that both Government and financial providers evolve in tandem with the changing landscape. With the right supports and partners, Irish SMEs can not only weather this period of cost pressure, but emerge from it stronger, more resilient and better prepared for the future” Auto-enrolment, due to come into effect in January 2026 met with a muted response. Only 2 in 5 (40%) of respondents feel that they have been adequately informed of the steps needed to implement it in time for its planned launch.  Cróna Clohisey, Director of Members and Advocacy, Chartered Accountants Ireland said  “The Government’s announcement that it will defer the launch of auto enrolment to January 2026 is welcome, particularly in view of the feeling of unpreparedness many businesses expressed in this survey.  Many remain very unclear as to what is expected of them in advance of the new system launching. Over the next six months, it is imperative that Government embarks on a concerted communications and awareness campaign to bridge this information deficit and equip businesses with the support and guidance they need to make auto enrolment the success it needs to be.”  Attitudes to & use of Government supports The survey revealed a significant gap between demand for, and uptake of government supports called for by SMEs: Tax relief or incentives – 40% called for these, but only 16% of total survey respondents report availing of them  Access to grants or loans - 31% called for these, but only 30% of total survey respondents report availing of them  Meeting energy costs – 28% called for these, but only 14% of total survey respondents report availing of them.  Attitudes to the effectiveness of the supports are mixed, which may go some way to accounting for the gap between demand and uptake:  5% feel supports for reducing regulatory and compliance burdens are effective.  22% rate access to grants or loans as effective. 23% believe supports for training and upskilling are effective.  Commenting Cróna Clohisey said “There is an evident mismatch between the need for supports and the uptake of those on offer. In the case of tax reliefs and access to grants or loans for example, this may be attributable to a perceived lack of accessibility, particularly for time and resource-constrained SMEs who simply find the application process too cumbersome. While the breath of current Government supports in these areas is positive, further steps need to be taken to ensure that business reliefs such as these are not overly difficult to claim if their effectiveness is to be meaningfully felt by small businesses.”    Mixed profitability and projections for coming year  Almost 3 in 10 (28%) report their business profitability has increased in the past six months, while a similar number (26%) report it has decreased. Small practice respondents reported greater stability, with 56% saying profitability remained the same, and only 15% saying it has decreased. For small business respondents, 30% reported decreased profitability in the past six months.     Despite the various economic headwinds facing the economy, there was a degree of optimism amongst respondents about their prospects for the coming year. 27% of respondents forecasted their business to be either somewhat or significantly better off by this time next year.  Overall, sentiment was more negative than positive however, with 36% saying they will be worse off.  Less optimism in the face of global headwinds   This negative sentiment was also evident when it comes to the broader economic environment, with a majority (74%) feeling less optimistic about the wider economy’s prospects compared to six months ago. Compounding this are ongoing tensions and uncertainty in global trade which have already impacted Irish business sentiment. 62% of respondents report that their business operations have been impacted by global trade tensions and tariffs and only 14% say they are prepared for a further escalation of such tensions.  The SME Business Sentiment Survey from Chartered Accountants Ireland and GRID Finance can be read in full here.   ENDS About the SME Business Sentiment Survey  The SME Business Sentiment Survey is conducted by Chartered Accountants Ireland and GRID Finance, the Institute’s Official Independent Lender Partner. The inaugural survey was conducted by Coyne Research between 4 and 21 April 2025 and will be repeated every six months. Approximately 300 members were surveyed from organisations employing fewer than 250 people.  

In order to assist readers, we have highlighted some key information resources to help you understand the impact of last week’s tariffs. There have been comments from all across the Accountancy profession, including some helpful publications providing tips for businesses as they adapt to the new global trading conditions. We also bring you the official White House publications which have accompanied the announcement of the tariffs. This includes the Fact Sheet which sets out the administration’s basis for claiming that the tariffs are a necessary tool to combat the myriad trade deficits the US operates with its global trading partners. Press releases from Government and the EU Statement by President von der Leyen on the announcement of universal tariffs by the US Statement by Taoiseach Micheál Martin on US decision to impose tariffs Statement from the Tánaiste on US announcements on tariffs House of Commons on what US tariffs on EU goods could mean for Northern Ireland Commentary from Accountancy profession KPMG - US tariffs - Understanding the implications for Ireland and the EU Grant Thornton - The implications of tariffs and trade wars PwC - US reciprocal tariffs EY – What are the implications of US President Trump’s reciprocal tariffs on global trade Deloitte - Tackling shifting tariffs: Timely tips for business leaders BDO – Tariffs & Trade in 2025: Practical Steps for Exporters and Importers Insights from Tax Research Tax Foundation - Trump Tariffs: The Economic Impact of the Trump Trade War Chartered Accountants Ireland reaction to US administration’s new tariffs Parliamentary Budget Office Trade between Ireland and the US April 2025 Official White House material Official White House Executive Order Official White House Article – “Tariffs Work – and President Trump’s First Term Proves It” Official White House Fact Sheet declaring National Emergency US International Trade Administration Official Website 2025 National Trade Estimate Report on Foreign Trade Barriers

US President Donald Trump last week announced 20 percent tariffs on all imports from the EU stating the imposition of the ‘reciprocal’ tariffs was required to address tariff and non-tariff barriers imposed by US trading partners. The Institute’s Director of Members and Advocacy, Cróna Clohisey has called the move a “regressive step” and is urging the Irish Government to work with the EU Commission to engage with the US administration in constructive dialogue. The Taoiseach, Micheál Martin released a statement noting his deep regret at the decision to impose 20 percent tariffs on imports from across the EU saying that Ireland would consider with EU partners on how best to proceed. The Taoiseach commented that the Irish economy is resilient, and that it is starting from a strong position. He is confident that we will weather the ensuing upheaval to global trade. The President of the European Commission, Ursula von der Leyen also released a statement noting the deeply regrettable choice which will massively impact the global economy. In setting out the many ways the tariffs will negatively impact citizens, she expressed a sincere openness to negotiating with the US.