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“Culture Eats Strategy for Breakfast” (Peter Drucker)
High 'effective tax rates' Ineffective funding options
Excessive / Punitive BureaucracyIneffective Start - up Reliefs
Lack of clear vision in taxes Flawed Entrepreneur ReliefFailure
(CT - 12½% v 20% v 25% v 40%)(EIIS unattractive – circa 180 cases each year)
(Must be unemployed for 12 months /
Linked to Employer’s PRSI)
(Increase in Fixed Penalties etc / Numerous deadlines and obligations /
Revenue, DSW, NERA, etc)
(AR complexity, > 66
caps on RR, ec)(33% CGT v 10% in UK for Entrepreneurs?)
(IT- 55% v 52% - No PAYE Credit)
(SURE – rerun of failed SCR)
(Abolished Loan Interest Relief for investing in co.)(€100 fee – Client pays €123 - €45 MKB (37%)
- €78 Taxes)
(Bankrupt? 5-8 years here v 1-3 years in UK)(Loss Relief Restrictions)(Cessation Costs might not be allowable)
SMEs
&
Entrepreneurs
Initial Considerations:
•Sole-trader v Company v Partnership
•Full-time v Part-Timeo Termination Payment to fund? Keep working but…
•Numerous Considerationso Exemptions like SYOBR v New Co. o Tax v PR v Protection etco Funding needs? Plant, Staff, Stock, Cash flow etco SURE v EIIS v Bank v Grants v Own Fundso Loss Relief? Pre-trading Costs?
•Remembero Moving from Sole-trader to company? Involving Children? Spouse?o Lost exemptions? CGT? Pre-Trading Costs?
Starting a Business:
•SYOBRo Must be unemployed for 12 monthso Must be NEW businesso No income tax for 2 years – capped at Profits of €40kpa – PRSI & USC still apply
•New Start-up Companies Reliefo No CT for first 3 years – but must be ‘New’ businesso Capped at €40k CT pa v Employer’s PRSI paido PRSI capped at €5k per employee – 8 employees earnings €46,500+?!?
•Loss Relief Restrictiono FA 2014 – Caps S.381 Relief only, S.382 c/f still fineo Part-time Traders – average 520 hours pa = 10 hpw but more if seasonal trade
o S.381 capped at €31,750 – S.381Bo No Relief via S.381 if S.381C – ‘tax arrangement – non-commercial trade etc’
Starting a Business – cont….:
•SURE (Start-Up Relief for Entrepreneurs)
o Amount invested in new company can be claimed ‘backwards’o Set against Income Tax paid over previous 5 yearso Extraction v Loan repayment
•EIISo Refunds of income tax for investment in qualifying companyo 30% initially, 10% in 4 years time if….o Must hold shares for 4 years now, was 3 years
•Tax & Other Obligationso Income tax – ‘proper books and records’, registration, Form 11, etco VAT – optional v prevented v compulsory, VAT invoices etco Employees? PAYE/PRSI, Must offer PRSA etco Software v Skills v Costs
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considered as these may have lead to errors and omissions.
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Please note that this presentation was intended to be a general guide only and further advice should be obtained before taking, or refraining from taking, any action. Neither the speaker nor MK Brazil accept any
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