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Budget 2015 honoured our predictions of it being the first non-austerity budget in seven years; a wise move considering the government's drop in poll numbers and the fact that there is only one more budget to go before the next general election.
While Finance Minister Michael Noonan repeatedly claimed in his speech that getting people back to work is a priority, the majority of changes made appeared to benefit the individual voter, with relatively little being done to encourage entrepreneurship or the small business. This was disappointing, but also surprising when 99% of businesses in Ireland are SMEs.
Budget 2015 Changes That Will Directly Affect the Franchisee
However, a few commitments were made which will aid the entrepreneur directly, including the following:
- Start-up companies are currently provided relief from corporation tax on trading income and on certain capital gains in the first three years of trading. This relief time will be extended for those becoming start-ups in 2015.
- The Local Enterprise Office, which offers information and support to people setting up or expanding business, has had its funding increased. It now plans to provide Start Your Own Business courses to over 3,000 people, run a Trading Online Programme to get at least 2,000 SMEs trading online, and create 1,600 new jobs.
- The Employment and Investment Incentive (EII) is the tax relief incentive scheme that provides relief to those investing in SMEs. Amendments have been made which will improve access to equity financing, and this is helpful for those looking for angel investment in larger franchises.
Budget 2015 Changes That Will Indirectly Affect the Franchisee
Improving economic circumstances mean that the Minister was able to increase take-home pay through moves such as reducing higher tax rates by 1%, raising the standard rate band to €33,800, and increasing the USC threshold. Such changes will boost disposable income and, as the Chairman of the Irish Franchise Association says, "put some additional cash in the consumer's pocket."
"Hopefully this additional cash will drive additional spending in the domestic economy," Chairman David Killeen told Franchise Direct Ireland. "Local businesses will benefit, especially in the retail/service sectors where traditionally franchised businesses are strongly represented."
"The €2.2 billion to be spent on social housing will provide a significant lift to the construction sector. The more builders we have building, the more likely we will see a significant increase in cash circulating in sectors normally well serviced by strong franchise brands."
Keeping hospitality VAT at the reduced rate of 9% will continue to assist with job growth in that industry, which will have a knock on effect for businesses in the food service and retail sectors.
Franchising the Country Back to Work
With 93% of franchises still trading successfully five years after being set up, they have a strong role to play in helping the Department of Finance reach its goal of lowering national unemployment to 10% next year. Perhaps the Budget's positivity will encourage more people to see a new economic landscape and consider taking their future into their own hands.