Capital Gains Tax to be slashed for start-ups

Jobs Minister Mary Mitchell O'Connor (pictured) says the rate will be reduced to 10% from 2017...

Capital Gains Tax to be slashed for start-ups

Minister of Jobs, Enterprise and Innovation Mary Mitchell O'Connor has pledged to vastly reduce the amount start-ups have to pay in Capital Gains Tax (CGT).

Speaking at the Small Firms Association's annual conference last week, she confirmed that the CGT rate for new start-ups would be slashed to 10% from 2017.

Budget 2016 had previously introduced a reduced rate of 20% on the sale of all or part of a company with an overall limit of €1 million in chargeable gains.

Minister Mitchell O'Connor also promised to increase the earned income tax credit from €550 to €1650 for the self-employed, as part of her efforts to meet the commitments to small businesses set out in the Programme for Government.

A new, voluntary PRSI scheme for the self-employed will be introduced. 

Addressing the more than 300 delegates at the conference, SFA Chairman AJ Noonan said:

"Small business often does not get the recognition it deserves because its contribution is based on thousands of smaller investments and jobs created every year rather than once-off ‘big bangs’.

"Much of Government policy is based on backing winners and attracting foreign multi-nationals, rather than creating an environment for more and more indigenous businesses to establish, create jobs, survive and succeed".

Noonan launched the SFA's new "Vision for Small Business in Ireland" report, and also unveiled the findings of the SFA's Summer Business Sentiment Survey.

It found that 60% of small businesses are growing, with two-thirds feeling that the business environment is improving generally and 70% intending to take on new staff this year.