The Government has announced a range of new measures in the Budget to help businesses, including a €250m fund to assist firms with the rising cost of doing business.
The Increased Cost of Business Scheme will offer once-off grants to up to 130,000 small and medium sized firms.
The payments will come in the form of tiered grants equivalent to up to 50% of the commercial rates paid by the firms this year.
Companies will need to be paying €20,000 or less in commercial rates to qualify for the payments, which will be made early in 2024.
"That, by the way, is 87% of all rates payers," the Minister for Enterprise, Simon Coveney said.
The SME support package has been welcomed by business group, Ibec, which said it will provide much-needed relief for firms facing substantial government-imposed increases in labour costs.
While Ibec said more work needs to be done in this area, it is crucial that this scheme becomes operational as quickly as possible, remains easily accessible, and serves as the starting point for a broader conversation about the transition to a Living Wage, pensions autoenrollment, and other significant labour market changes over the coming years.
ISME said the support averages €1,923 per business and " it remains to be seen if this will be sufficient to keep them going".
There was less good news for firms with the announcement that PRSI for employers as well as employees would increase by 0.1% in October next year.
The Minister for Public Expenditure, Paschal Donohoe, said the measure would raise €240m in a full year and "is a modest but necessary step to secure pension entitlements for this and for future generations."
A number of changes were also announced to help encourage investment in startup firms.
There is to be a new targeted capital gains tax rate of 16% for angel investors aimed at making Ireland a more attractive location for angel investment.
"It will allow angel investors to benefit from a reduced rate of CGT when they dispose of a qualifying investment, for gains up to twice the value of their investment," Mr McGrath said.
The R&D tax credit is to rise from 25% to 30% in a move that Michael McGrath said would maintain the net value of the existing credit for those businesses subject to the new 15% minimum effective tax rate, while also delivering a real increase in the credit to those smaller companies who will not be in scope of Pillar Two.
"I am doubling the first-year payment threshold from €25,000 to €50,000, to provide valuable cash-flow support to companies engaged in smaller R&D projects," he added.
"I hope this will encourage more businesses to engage with the regime."
The Employment Investment Incentive Scheme is also to be enhanced, through the standardisation of the investment period to four years for all investment.
The amount an investor can claim relief on for four-year investments is also to be doubled to €500,000.
"These enhancements will help unlock more equity investment in smaller, early stage, businesses which are typically most in need of funding," the Minister for Finance said.
The Government is also extending the upper age limit for Retirement Relief from 65 to 70, with the reduced relief now applying up to 70 from 1 January 2025.
"I will also introduce a limit on disposals to a child up to the age of 70, as recommended by the Commission on Taxation and Welfare," Mr McGrath said.
Minister McGrath added that he has secured EU State Aid approval to commence amendments announced last year to the Key Employee Engagement Programme, which aims to improve the attractiveness of employment at SMEs.
"The amendments include the extension of the scheme to the end of 2025 and a doubling of limit for the total market value of issued but unexercised qualifying share options from €3 million to €6 million," he said.
The current cap on the Section 481 Film Tax Credit is to rise from €70m to €125m.
But in a move that will impact the banking sector, the banking Levy is to rise to €200m next year, up from around €87m.
Regarding VAT, the registration thresholds for businesses is to rise from €37,500 to €40,00 for services and €75,000 to €80,000 for goods.
Following the completion of a cost benefit analysis of the Revised Entrepreneur Relief, the minister said he has asked officials to examine opportunities to refocus the relief in order to improve incentives for founders and entrepreneurs.
On the Benefit-In-Kind (BIK) for company cars, the temporary universal relief of €10,000 to the Original Market Value announced earlier this year has been extended for a further year.
The Government is also temporarily suspending the tapering of the preferential BIK relief for 2024 and 2025 on electric vehicles.
"I am therefore maintaining the existing €35,000 Original Market Value reduction for 2024 and 2025," Minister McGrath said.
Extra money has also been allocated to help business development, including €9m for Local Enterprise Offices, €3 million for the Digital Services Coordinator and €27m in capital for the IDA's Regional Property Grants Programme.
Scale Ireland, which represents Irish start-ups, said it strongly welcomed the measures announced to support the indigenous tech sector.
The group highlighted the increase in the R&D tax credit rate, reduced capital gains tax for angel investors and the doubling of the investment ceiling for investments held under the Employment Investment Incentive Scheme.
"Budget 2024 delivers for the indigenous tech sector with important and tangible changes for Ireland's entrepreneurs and founders," said CEO of Scale Ireland, Martina Fitzgerald.
"The increase in the R&D credit rate will incentivise increased R&D activity and spending in our sector," Ms Fitzgerald said.
