Starting a business takes nerve. You put your savings, your time and often your sleep on the line, and the rewards can take years to arrive.
In his Budget speech, the Minister for Finance described small business owners, risk-takers and entrepreneurs as the bedrock of the economy, and Budget 2027 backs that up with action. Key start-up reliefs are being extended, the R&D tax credit is getting more generous, and there's a lower Capital Gains Tax rate for when you eventually sell.
Whether you're just getting started or ready to scale, here at Gilheany & co we've picked out the measures worth knowing about.
Starting up and raising money
The Government wants more private investors to take a chance on Irish start-ups, so the main reliefs that support them are being extended:
- Employment Investment Incentive (EII): income tax relief for people who invest in qualifying Irish small and medium businesses.
- Start-Up Capital Incentive: a similar relief aimed at investors in very young companies.
- Start-Up Relief for Entrepreneurs (SURE): lets people who leave a job to start their own business claim back income tax they paid in previous years.
- Angel Investor Relief: a lower Capital Gains Tax rate for investors who back innovative start-ups.
- Corporation tax start-up relief: relief from corporation tax in the early years of a new company.
The four investor and entrepreneur reliefs depend on new EU State aid rules being adopted, so the fine print may take a little while to settle.
For companies ready to grow, the Ireland Strategic Investment Fund is launching a €1 billion, three-year programme, working with Enterprise Ireland to help ambitious Irish firms scale up while staying rooted here. And when the time comes to sell, Capital Gains Tax is coming down from 33% to 31%, with Revised Entrepreneur Relief still available on qualifying gains.
Research and innovation
If your business develops new products, processes or technology, the R&D tax credit is well worth a look, and Budget 2027 makes it more generous and easier to use:
- More room to outsource. You can now claim for more R&D work subcontracted to universities and other third parties, with the limits rising from 15% to 20% and from €100,000 to €200,000.
- Better cash flow for smaller projects. The amount you can receive in the first year goes up from €87,500 to €105,000.
- A boost for wage costs. A new enhancement is being introduced for qualifying R&D wage costs.
- Less paperwork for clinical trials. If a trial is regulated, that alone can now satisfy the science test.
The Knowledge Development Box, which offers a lower tax rate on profits from qualifying intellectual property developed in Ireland, has also been extended for another five years.
Simpler company tax
A few changes should take some of the uncertainty out of running a limited company:
- Preliminary tax. The threshold for being treated as a small company for preliminary tax is going up. That means more companies can base their payments on last year's tax bill, rather than having to estimate this year's, which makes cash flow easier to plan.
- Interest rules. The rules on tax relief for interest on certain business and investment borrowing are being simplified.
- A review of business supports. The Government is also looking at all the grants, tax incentives and business programmes on offer, with a view to making them simpler and more effective.
Make the most of what's on offer
Reliefs like these can make a real difference to a growing business, but they come with conditions and they're easy to miss. Whether you're starting out, raising money, investing in R&D or planning your exit, the team at Gilheany & co can help you work out which ones apply to you and how to claim them. Just get in touch.
