Small businesses to get up to €10,000 each in aid scheme

Small businesses will get up to €10,000 each in cash from the State early next year to aid them in tackling rising costs.

The Government has earmarked €250 million in Budget 2024 to support enterprises grappling with ongoing inflation driven mostly by global conditions.

Minister for Enterprise Simon Coveney predicted on Tuesday that the scheme would benefit about 130,000 small businesses that will pay up to a maximum of €20,000 each in local authority rates in 2023.

They will receive half of what they paid in rates this year, up to €10,000 each, in the first quarter of 2024, the Minister confirmed.

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“That’s 87 per cent of all ratepayers,” said Mr Coveney. “We thought this was the fairest way of calculating it.”

He added that the Government was aiming the scheme at “the butcher, the hairdresser, the local retail outlet on your main street” as it recognised that the going had been tough for many of these businesses since the pandemic’s end.

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“You don’t have to apply, the money is going to come to you,” the minister added, explaining that all businesses that paid up to €20,000 in local authority rates this year would automatically qualify.

Asked if there was a risk that councils could increase those same businesses’ costs by increasing their commercial rates in 2024, he said that would be a decision for those local authorities and their councillors.

“I think they would be very foolish to be putting businesses in the position where their costs go up,” he argued.

Total funding to his department increased 3.7 per cent to €979 million. That includes a €26 million boost in capital spending to €584 million and €9 million extra to cover a likely €395 million bill for day-to-day costs.

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Mr Coveney said that the increase to 30 per cent from 25 per cent in the research and development tax credit would preserve the value of this incentive for large companies whose corporate tax bills were set to increase to 15 per cent of profits from next year.

The Minister said that the new system, agreed with the Organisation for Economic Co-operation and Development, treated tax credits as income and so taxed them.

This would have reduced the tax break’s benefit to any business going on to the 15 per cent rate from next year. To bridge that gap, the Government needed to increase the rate to 29 per cent, so decided to bring it up to 30 per cent.

“It was the only way, essentially, of keeping the rate unchanged,” said Mr Coveney.

He added that those businesses who remain on the 12.5 per cent rate would enjoy an increased benefit from the tax break while doubling the payment threshold to €50,000 would boost all organisations carrying out research and development in the State.

The department maintains that regions outside Dublin will benefit from the Government’s planned extra enterprise spending.

Businesses can apply for their share of the initial €35 million allocated to the Smart Regions Enterprise Scheme from Wednesday, the Minister noted.

Earlier Minister for Public Expenditure Paschal Donohoe said he had earmarked €27 million extra for IDA Ireland’s regional property grants programme, meant to encourage multinational investment outside the capital.

Local enterprise offices, meant to support new business in their regions, will get an extra €9 million.

“This will allow them to extend their financial supports and mentoring programmes to a wider cohort of indigenous businesses,” said Mr Donohoe.

The Digital Services Co-ordinator will receive €3 million to aid enforcement of the Digital Services Act.