Three Chartered Accountants consider the Government support on offer to SMEs in the North and south and the wider environment for entrepreneurship on the island of Ireland Shaun McGlade Managing Director SMCG Ltd Homegrown businesses in Ireland, North and south, face a myriad of challenges. These include geopolitical, environmental and economic uncertainties in addition to the impact of digital disruption, skills shortages and the evolving needs of the workforce – and all while they continue to grapple with inflationary pressures.  Government-backed organisations such as Invest Northern Ireland and Enterprise Ireland provide valuable support to businesses, with a focus on export-oriented companies and high-potential start-ups, both of which are seen as vehicles to boost the economy of the island of Ireland. Businesses across Ireland have been navigating the post-Brexit landscape, while businesses in Northern Ireland are also dealing with challenges and opportunities presented by the Northern Ireland Protocol – now the Windsor Framework – which provides access to both the British and EU markets.  This represents a significant opportunity for businesses in Northern Ireland, but it also introduces complexity and uncertainty in completing transactions across borders.  One key strand of Government support for businesses in Northern Ireland has been the establishment of the Trader Support Service. This is aimed at helping companies to contend with changes in the way goods move under the Windsor Framework.  Thousands of businesses have registered with the free-to-use platform since its launch in 2020. This service is due to end after December 2024, however, and this is something the recently restored Northern Ireland Executive must lobby the British Government to retain so that businesses in Northern Ireland can continue to avail of it beyond the end of the year. As a relatively small practice, we at SMCG Ltd have found that the professional network built over time with colleagues in the profession, along with professionals in other industries, has been a source of great support.  This is reflective of the ethos and culture prevalent in Irish society down through the generations to “help your neighbour” even though they may also be a competitor.  It is even more imperative, therefore, that the governments in the North and south proactively address the challenges facing our community of SMEs on the island of Ireland.  This requires a strategic approach, avoiding reactionary politics, and fostering an environment that encourages business investment and provides critical infrastructure for homegrown businesses to flourish. Susan HayesCulleton Managing Director The HayesCulleton Group Our company started in September 2010 and in the years since, I believe Ireland has steadily improved as a place to do business. The entrepreneurial ecosystem has become far more inclusive. In the past, the broad supports offered by the Local Enterprise Offices (LEOs) were tailored towards internationally traded services and manufacturing, but this has changed drastically.  The Local Enterprise Offices Policy Statement 2024–2030, released in May, stated that the LEOs would have an increased capital budget of €44.8 million in 2024 available to 37,000 businesses, excluding those supported by IDA, Enterprise Ireland and Udarás na Gaeltachta. Further, we are now seeing far more trade missions, funded initiatives for environmental and social sustainability, and opportunities to build relationships across borders.  At the time of writing, Enterprise Europe Network has 5,659 available partnering opportunities, enabling us to partner with distributors and procure goods from around the world.  InterTradeIreland has a target to help 10,000 businesses every year with comprehensive online cross-border trade information. The expanding diplomatic footprint of the Department of Foreign Affairs – with 57 Embassies and 108 Consulates – also offers a landing pad for Irish businesses that want to export. While Ireland is perhaps better known for accommodating foreign direct investment, I think the ecosystem for homegrown businesses here is hugely supportive. Enterprise Ireland does a fantastic job in the provision of seed investment, advice and – in my experience – has a passionate team of people at home and abroad who take as much pleasure in seeing homegrown businesses win in international markets, as the business founders themselves.  At HayesCulleton, we have encountered some wonderful people and they have led us to engagement opportunities that have resulted in new business for our firm. If I were to make one change, however, it would be to making it easier to navigate the SME support system in Ireland.  Kealan Lennon Chief Executive CleverCards Ireland has tax incentives to drive investment in research and development and well-educated talent coming out of our universities and colleges.      The big challenge for homegrown business support in Ireland is not at the early seed stage, however, but at the scaling stage – particularly for ambitious founders with a global vision.  The number one challenge for businesses scaling up is access to capital. The Government and Enterprise Ireland have funded several venture capital funds in Ireland to deploy investment at the seed and Series A stages. There is a complete gap from the Series B stage and onwards, however, and this has been the case for years.  Bridging this gap, in my view, would be the difference between scaling companies “exiting” through acquisition by international players (in the absence of capital to scale further) and continuing further along the journey themselves to build global businesses that are “homegrown” in Ireland.  CleverCards has developed a digital payments platform that enables businesses and public sector organisations to configure digital Mastercard accounts themselves.  By serving many multinational companies headquartered in Ireland, the US is our nearest market to the west while Britain and the European Union represent a huge market to the east.  So, our experience is that Ireland is a great place from which to scale internationally. However, early-stage growth and expansion requires risk capital to bridge the gap where later-stage private equity and debt markets are more readily available.

The Institute’s latest thought leadership papers outline a series of measures needed to support Ireland’s SMEs, write Cróna Clohisey and Michael Diviney. The Institute has published the latest in its series of thought leadership papers. Supporting SMEs was informed by the views of our 33,000 members and sets out the measures that we believe are needed to achieve strategic, systemic improvements for SMEs operating across Ireland. SMEs make up the vast majority of all businesses in Ireland, and collectively they employ close to seven out of 10 people working in the business economy. It is clear from engagement with members that a critical marker of Ireland’s future economic success will be supporting our SME sector by reducing the cost and complexity of doing business. 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 percent and additional sick leave entitlements have added one percent to payroll costs. From 1 October, the rate of Employer, Self-Employed and Employee PRSI will increase by 0.1 percent, while pensions auto-enrolment will add a further 1.5 percent in costs during 2025. Supporting SMEs calls on the Government to be cognisant of the challenges all of the above brings. While the measures are extremely important for employees, consideration must be given to the timing of implementing new employment law, and the impact on SMEs when all are introduced within a short timeframe. The paper sets out a series of proposals, 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. Alleviating the administrative and cost burden for SMEs is at the forefront of our asks which include the following proposals: Minimum wage workers, working a full week, should be exempted from Employers’ PRSI. Tax discrimination against professional service companies must end so that they can benefit from the various investment reliefs available to comparable trading companies. Reducing Capital Gains Tax from 33 percent to 25 percent to stimulate business and personal transactions that will bring additional funds into the Exchequer. The real time reporting requirement for enhanced reporting requirements (ERR) for employers should be removed and replaced with monthly or even 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. 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. Financial stability is paramount to this. The Institute is calling on Government to support SMEs in accessing finance, optimising governance structures, and investing in developing their workforces. Proposed measures to ensure resilience and the continued growth of this vital sector of the economy include: Widening the eligibility criteria for the broad range of grants available to include more ‘traditional’ industries and the 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 location, is needed. Promoting healthy competition in the business lending market, by enhancing the role community-based lenders and alternative lenders can play in addition to the pillar banks. It is well documented that record corporation tax receipts will not always be with us and there is a strategic imperative to ensure long-term economic health for SMEs. 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. CCAB-I’s Pre-Budget 2025 submission focuses on supporting and sustaining our SME sector Continuing the focus on the importance of the SME contribution to the Irish economy, the Institute, under the auspices of the CCAB-I, delivered its pre-Budget 2025 submission to Minister McGrath last month. The paper highlights the constraints experienced by SMEs as a result of increasing labour costs and also states that a lack of supply of housing and childcare places, in addition to high personal tax rates, are making it increasingly difficult for people to live and work affordably in Ireland. The submission identifies four key areas for budgetary focus: support SMEs by exempting minimum wage workers from employers’ PRSI and simplifying tax legislation; increase the number of childcare places available and offer working parents a €1,000 tax credit to return to the workforce; introduce a 30 percent intermediate rate of income tax to retain and attract workers and help people live affordably; continue to stimulate and support the completion of new houses. The CCAB-I believes that Ireland’s tax code has become increasingly complex in recent years and is calling for simplification of the tax rules to support businesses, enable them to grow and also ensure that Ireland remains competitive on an international stage. Childcare provision In terms of childcare, the submission includes measures to improve the supply of childcare places for pre-school children. To address the impact of working parents leaving the workforce following the birth of their children on the labour supply, the CCAB-I is calling for the introduction of a €1,000 tax credit for working parents to encourage them to return to the workforce. The CCAB-I also asks that the government plans for adequate capacity in the childcare sector by analysing local needs and ensuring adequate funding for the sector. Income tax reforms The CCAB-I believes that introducing a third rate of income tax of 30 percent would make the system more equitable. Workers in Ireland pay income tax at a rate of 40 percent once they earn €42,000. This entry point is below the average wage and is significantly lower than most countries across the UK and Europe, where incidentally having more than two tax rates is extremely common. We are a mobile profession where many are in the early stages of their careers and are planning their futures. Introducing an intermediate 30 percent rate would make the system more attractive and more equitable, lessening the tax burden on workers and putting more money in their pockets. Housing measures The submission proposes: extending the Help-to-Buy Scheme by two years to 31 December 2027; abolishing vacant homes tax; increasing the rent-a-room relief from €14,000 to €20,000 and removing the cliff-edge; abolishing the non-resident landlord withholding tax system. Cróna Clohisey is Acting Director of Advocacy and Voice at Chartered Accountants Ireland Michael Diviney is Head of Thought Leadership at Chartered Accountants Ireland.

CEOs are leveraging M&A for tech-driven growth and market expansion, embodying innovation and sustainability in a dynamic business landscape, explains Fergal McAleavey In the rapidly evolving business landscape of 2024, global CEOs continue to use mergers and acquisitions (M&A) to navigate innovation and transformation across their businesses.  The latest CEO Outlook Pulse Survey from EY shows businesses are engaging in M&A activity with renewed vigour, considering it a strategic support for addressing key priorities. The survey found that acquiring technology, new production capabilities and innovative startups, growing market share and accessing new geographies stood out as the top three strategic drivers for CEOs pursuing M&A. Irish M&A: growth and innovation In Ireland, the M&A landscape is particularly vibrant, with CEOs and investors showing a keen interest in a variety of transaction opportunities, from trade sales to private equity investment to strategic alliances. Ireland's thriving tech sector and business-friendly climate have fuelled a boom in deal-making, outpacing the UK and EU. This is likely to continue as companies pursue innovative technologies and seek to capitalise on the entrepreneurial energy of startups that have scaled. The strategic imperatives for Irish M&A are expected to align with global patterns, emphasising the acquisition of larger market shares, expansion into new markets, and the integration of advanced technology into existing operations. This is especially pertinent for Ireland, given its status as a European tech hub.  Ensuring strategic objectives are met CEOs are also signalling their readiness to streamline their portfolios, shedding assets to address ESG goals and refine their focus for the challenges ahead. Sustainability due diligence is playing an ever-increasing role in M&A transactions to assist buyers and sellers to ensure that those deals are aligned with their own corporate sustainability objectives. This strategic deal-making is not merely a short-term solution but is part of a broader, long-term vision to build resilience and adaptability for an unpredictable future. Irish CEOs' strategy With global funding markets more receptive in 2024, Irish acquirers may find it easier to secure financing for deals and may be the target of larger companies seeking to expand their geographic footprint or product offering. However, they must remain cautious of potential market tightening as political events unfold. For those looking to divest, the market's increasing appetite for acquisitions and the continued resurgence of private equity (PE) could provide favourable conditions. Nonetheless, the timing of PE's full-fledged return to the M&A space remains a little uncertain for large transactions as they await potential interest rate decreases, particularly in the Eurozone and the UK. Irish companies must stay attuned to shifts in monetary policy that could influence the M&A landscape.  To provide corporate sellers with more control over M&A transactions, particularly as a counter-measure to lengthy deal timelines that have become a feature of the M&A market in the last few years, time is well spent by those sellers preparing potential divestment assets for sale, including anticipating issues of particular relevance to likely buyers of those assets and identifying potential regulatory approval requirements that may add to longer deal timelines. Sell-side due diligence of prospective buyers can also be warranted to help flush out any potential roadblocks or delays that may arise from ever-increasing competition law, foreign direct investment and foreign state aid regime requirements.  The M&A momentum for the remaining months of 2024 is characterised by strategic foresight, adaptability, and a commitment to sustainability, as both global and Irish corporate leaders and investors navigate the complexities of a rapidly evolving business world. Fergal McAleavey is Partner of Corporate Finance – Strategy and Transactions at EY