Budget 2020 - Technology Ireland response
Tuesday, 8 October 2019Technology Ireland, the Ibec group that represents the technology sector, today stated that Budget 2020 is broadly as expected but on the lower end of what we hoped for.
Technology Ireland Director, Una Fitzpatrick, said: “Budget 2020 features significant changes to the R&D tax credit for SME companies. However, the opportunity has not been taken to expand and improve CGT for entrepreneurs, which given our low start-up rate – the second lowest in the EU15 and one quarter that of the UK – is disappointing. We do welcome Minister Donohoe asking his department to consider the outcome of an external review of CGT entrepreneurial relief to determine changes that could be made to the relief to better support entrepreneurs and entrepreneurial activity.’’
While Technology Ireland called for increasing the EII scheme limit from €150,000 to €2 million, the increase to €250,000 is a step in the right direction and the new €500,000 annual limit for investors investing for 10 years is viewed positively.
Ms. Fitzpatrick states: “The KEEP scheme remains overly restrictive for truly high potential firms. However, we welcome the flexibility announced to grant KEEP share options to be applied to company group structures and adjusting the rules of the scheme to allow for part-time and family friendly working arrangements as well as allowing existing share options to qualify for KEEP.”
Technology Ireland Chairperson, Jonathan Hyland, CTO for Workhuman, said: ‘’The R&D tax credit increase from 25% to 30% for small businesses as well as the increase in the percentage of R&D spend that can be outsourced to third level organisations is welcomed by Technology Ireland members. However, we hope to see these changes combined with a less bureaucratic system which can sometimes put smaller companies off applying.”
“The technology sector in Ireland has undoubtedly been one the keystones of Ireland’s economic and social growth in the past 30 years. However, our current achievements are no guarantee of future success. We need a business environment that supports entrepreneurship and rewards innovation and risk taking.”