The Government says its scheme to help entrepreneurs recover up to 41% of their start-up costs by way of refunds on previous income tax bills will encourage many more people to set up in business and create jobs.
The new scheme, which is called Sure —StartUp Refunds for Entrepreneurs — will help people who were in Paye employment to start their own companies by making it easier to raise the initial investment from banks for their start-ups, Minster for Finance Michael Noonan and Jobs Minister Richard Bruton said at a media launch.
Budding entrepreneurs can get a refund of up to 41% of the capital invested in their new business by way of a “generous refund”.
The publicity campaign includes a new website, sure.gov.ie, an online calculator to help start-ups estimate how much they could receive and a guide from the Revenue that explains the details of the incentives.
The scheme allows entrepreneurs to tap refunds of personal income tax paid in the six years before starting the business. A limit of 41% of the total investment in the start-up will apply. Entrepreneurs can show their refund estimates to their banks to raise capital for their new business.
Sure.gov.ie aims to help existing employees, unemployed and the retired to set up in business, the Government says.
“Two thirds of all new jobs across the economy are created by start-ups in their first five years of existence, and that is why we are putting in place a range of new measures specifically aimed at encouraging more people to start their own business,” Mr Bruton said.
“In Ireland, we have great start-ups, we just don’t have enough of them,” he said.
Mr Noonan said a lot of effort had been applied to make the incentives easy to understand. Gina Quin, the chief executive of Dublin Chamber said Sure.gov.ie is a big improvement on existing plans.
“The Sure.gov.ie scheme may not be perfect, but the seed capital scheme wasn’t producing the results. It’s encouraging to see the Government taking a more start-up-focused approach, by letting the seed scheme fail and replacing it with a better programme that is more in line with what the start-up market needs,” she said.
However, the Irish Pro-Share Association said the new incentive, though helping start-ups raise investment funds from banks, will do little to help them recruit the key staff that they need.
“Enterprise Ireland is spending a large amount of financial resources encouraging Irish tech start-ups to grow but these small companies are stunted from birth as they cannot lure top tech staff away from the major multinationals to come and work for much smaller firms as they cannot match their remuneration packages,” said Gill Brennan, joint CEO at IPSA.
“To stay alive in the early years it’s essential to minimise cash burn by limiting wages. This can be got around by giving people shares in companies that hope to become high growth.
“The shares are a non-cash item and help tie staff into a company for the longer term, dramatically lessening staff churn while giving staff the potential of a major payday in the future if the company is successfully floated or sold,” she added.
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