THERE WERE A number of good news stories for the self employed in today’s Budget.
A section of society that has been less than impressed for some time with the disparity in treatment between themselves and PAYE workers when it comes to benefits among other things, the sector has received a number of fillips today.
Michael Noonan today announced that from January 2017 the Capital Gains Tax (CGT) threshold on earnings for entrepreneurs will be decreased from 20% to 10%.
Also, the tax penalty for the self-employed has been narrowed with the earned income tax credit rising by €400 to €950.
This is however less than the €550 that was widely expected, and also leaves the sector lagging behind the automatic cutoff deduction for PAYE workers of €1,650.
The attempt to draw parity between self employed and PAYE workers had previously a three year term placed upon it, albeit, as Patricia Callan of the Small Firms Association (SFA) says it had been expected they would be “three equal years”.
Callan sees today’s budget as something of a “missed opportunity”, particularly in the fallout from Brexit.
“The whole tone of today’s announcements were ‘tinkering’,” she told TheJournal.ie.
We still have the issue of the self-employed paying the additional 3% in USC (Universal Social Charge) on earnings over €100,000.
And the threshold for CGT is still €1 million. It’s £10 million in the UK. That’s not adaptable to the post-Brexit world. With margins tightening after Brexit, you are going to see firms going straight to the UK rather than setting up here.
Callan says that the budget they have seen is “not at all Brexit-proof”.
“Hopefully the measures introduced will bring capital back into the market, but we need more support for small businesses should they fail,” she says.
They said in the budget that they would look at a share options programme for next year, but what’s the point of that?
We need measures now, not in the future.
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