Budget 2014: Start Your Own Business scheme

y0ssar1an22

"a new Start Your Own Business scheme is to be introduced to help those unemployed for at least 15 months to start their own businesses, by offering them a two-year exemption from income tax."

Source: http://static.rasset.ie/documents/news/budget-speech.pdf

I recently applied for the BTWEA, anyone have any info on how these 2 schemes will interact?

FueledbyCoffee

I would be very interested in this also - my BTWEA has just been approved today and I don't know how to feel

Not much of an incentive to be honest. Year one probably unlikely to be paying much income tax anyway. What people want is help to start the business in the first place, but I guess they don;t have the cash for this kind of thing right now.

Lord TSC

I'd love to start up my own business, but what I need is a better Start Up loan system rather than tax relief which seems to help people who already have the resources to get the business off the ground

y0ssar1an22

Teamshadowclan wrote: »

I'd love to start up my own business, but what I need is a better Start Up loan system rather than tax relief which seems to help people who already have the resources to get the business off the ground

use indigogo.com to (hopefully) get crowd funding.

FueledbyCoffee

I have all my stock to get started but I'm robbing Peter to pay Paul iykwim ? Mortgage payment is going to have to wait this month, it's not a habit I want to get into but I need shop equipment, signage etc.
I'm trying to look at the bigger picture and just need a little help to get moving - it's very tough.

jimmii

Fair play to anyone who goes from 15 months uneployed to being self-employed and is paying income tax in the first year!

jimmii

FueledbyCoffee wrote: »

I have all my stock to get started but I'm robbing Peter to pay Paul iykwim ? Mortgage payment is going to have to wait this month, it's not a habit I want to get into but I need shop equipment, signage etc.
I'm trying to look at the bigger picture and just need a little help to get moving - it's very tough.

Yeh its tough to get it open alright! We started off with only about half the display stuff we wanted and filled in the spaces with Ikea stuff and then as we have had the money replaced the ikea stuff with what we actually wanted. We didn't even have a sign for the first few months! If you are allowed where you are an A-Frame outside actually gets a lot more notice and is a lot cheaper! If you are around Dublin I can give you the name of the guy who did my sign I think it cost €400 in total which was way, way less than I was getting quoted elsewhere!

EDIT: sorry to derail!

y0ssar1an22

I emailed citizens info and Dept of Jobs, Enterprise and Innovation today:

I recently applied for the Back to Work Enterprise Allowance, and am awaiting feedback on that application. My question:
How does the BTWEA interact with the new scheme announced in Budget 2014- the Start Your Own Business, where you are exempt from income tax for 2 years?
Can you avail of these 2 schemes at the same time?

One final question regarding the Start Your Own Business Scheme: you get 2 years exemption from income tax. Is that 2 complete years? Or, if I registered a business today, would I be exempt from income tax for the remainder of 2013, and the full year of 2014, thereby only getting ~14 months income tax exemption?

So hopefully they'll get back to me tomorrow and i'll update here.

marlie2005

y0ssar1an22 wrote: »

I emailed citizens info and Dept of Jobs, Enterprise and Innovation today:

I recently applied for the Back to Work Enterprise Allowance, and am awaiting feedback on that application. My question:
How does the BTWEA interact with the new scheme announced in Budget 2014- the Start Your Own Business, where you are exempt from income tax for 2 years?
Can you avail of these 2 schemes at the same time?

One final question regarding the Start Your Own Business Scheme: you get 2 years exemption from income tax. Is that 2 complete years? Or, if I registered a business today, would I be exempt from income tax for the remainder of 2013, and the full year of 2014, thereby only getting ~14 months income tax exemption?

So hopefully they'll get back to me tomorrow and i'll update here.

Any update on this , am very interested to see if you can do the two combined ?

y0ssar1an22

marlie2005 wrote: »

Any update on this , am very interested to see if you can do the two combined ?

no yet...lazy fooks. I'm gonna ring them tomorrow

betonit

y0ssar1an22 wrote: »

"a new Start Your Own Business scheme is to be introduced to help those unemployed for at least 15 months to start their own businesses

why wouldnt it apply to anyone wanting to start their own business, surely if some is on the dole and has a viable idea they should qualify

Stereomaniac

Well, I don't really know the answer to that question but there's always a catch, isn't there?

y0ssar1an22

just rang citizens info there....put on hold for about ~5mins. Lady came back not knowing the answer. I will ring revenue now and update shortly (probably should have rang them 1st)

y0ssar1an22

Good old Revenue...10 mins on hold, to be told they dont have any info on the new scheme, so cannot answer any questions on it. When they announce these schemes you would think they have done the work to implement it, and have given the relevant people info on it.
I get the feeling they announced the scheme without any preparation or thought, and now they have to sort out the ins-and-outs (which will probably take a year)

marlie2005

Thanks for the update , but they way they organise these schemes is just ludricrious... Why even mention these incentives if they're have not got the details organised..
But it would be worth something if you could get it in conjuction with the back to work .. hopefully this will be the case ... Time will tell ...

ssbob

Just a couple of points:

1. The measures announced were Budget 2014 so will not kick in until then I would imagine. These need to be passed with the finance bill etc so there is still a bit of time involved.
2. I am not a fan of the govt but to be fair this seems like a relatively low cost(from their point of view) measure of getting a few hundred off the Dole.
3. As mentioned above most people will be paying little or no tax anyway for the first couple of years.
4. I would imagine it will definitely work in conjuction with the BTWEA.

Lord TSC

ssbob wrote: »

Just a couple of points:

1. I am not a fan of the govt but to be fair this seems like a relatively low cost(from their point of view) measure of getting a few hundred off the Dole.

Will it though? Is income tax the reason the unemployed of 15 months and longer aren't starting up their own business? Feels like this is something that sounds good for politicans but doesn't actually offer that massive an incentive...

ssbob

Teamshadowclan wrote: »

Will it though? Is income tax the reason the unemployed of 15 months and longer aren't starting up their own business? Feels like this is something that sounds good for politicans but doesn't actually offer that massive an incentive...

Like I said, I reckon it will get a few hundred off the Dole but won't make a massive indentation to our live register.

When you consider this measure along with the measures outlined for the construction industry (ie. Tax reclaim for renovations between €5,000 and €30,000) then perhaps this will suit tradesmen who set up their own businesses rather than entrepreneurs.

Pj!

Details of this released in the Finance Bill


Relief for long-term unemployed starting a business

6. Chapter 1 of the Principal Act is amended by inserting the following after section 472A:
In this section—

‘Act of 2005’ means the Social Welfare Consolidation Act 2005;

‘continuous period of unemployment’ has the meaning assigned to it in
section 141(3) of the Act of 2005;

‘crediting contribution’ means a crediting contribution provided for by
regulations made under section 33 of the Act of 2005;

‘new business’ means a trade or profession which is set up and
commenced by a qualifying individual during the period beginning on
1 January 2014 and ending on 31 December 2016, other than a trade or
profession—
(a) which was previously carried on by another person and to which
the qualifying individual has succeeded, or
(b) the activities of which were previously carried on as part of another
person’s trade or profession;

‘qualifying individual’ means an individual who commences a new
business and—
(a) who—
(i) has been continuously unemployed for the period of 15 months
immediately preceding the commencement of that business, and
in respect of that period of unemployment, was entitled to
crediting contributions, or
(ii) in respect of a continuous period of unemployment of not less
than 390 days immediately preceding the commencement of that
business, has been in receipt of—
(I) jobseeker’s benefit under Chapter 12 of Part 2 of the Act of
2005,
(II) jobseeker’s allowance under Chapter 2 of Part 3 of the Act
of 2005, or
(III) one-parent family payment under Chapter 7 of Part 3 of the
Act of 2005,
and
(b) who was not previously a qualifying individual for the purposes of
this section;

‘qualifying period’ means a period of 24 months beginning on the date
the qualifying individual commenced a new business;

‘unemployment payment’ means any payment, including crediting
contributions, to a qualifying individual under the Social Welfare Acts
made during the period of 15 months immediately preceding the
commencement of a new business.

(2) For the purposes of the definition of ‘qualifying individual’ in
subsection (1)—

(a) any period where an individual is in attendance at, or participating
in, a scheme or programme of employment or work experience, or a
course of education, training or development, where such a scheme,
programme or course is approved for the purposes of this paragraph
by the Minister for Social Protection or the Minister for Education
and Skills, with the consent of the Minister for Finance, shall be
deemed to be part of a continuous period of unemployment for the
purposes of this section,

(b) any payment in respect of a period of attendance at, or participation
in, a scheme, programme or course mentioned in paragraph (a)
shall be deemed to be an unemployment payment for the purposes
of this section if the qualifying individual concerned was in receipt
of an unemployment payment immediately prior to the
commencement of such period, and

(c) any Sunday in any period of consecutive days shall not be treated
as a day of unemployment and shall be disregarded in computing
any such period.

(3) Subject to this section, where, on making a claim, an individual proves
that he or she is a qualifying individual, he or she shall be entitled in
any year of assessment falling wholly or partly within the qualifying
period to deduct from or set off against the profits or gains of the new
business, on which that individual is assessed under Case I or Case II
of Schedule D, an amount equal to the amount referred to in
subsection (4).

(4) The amount to which subsection (3) refers is an amount equal to the
lesser of—
A x B/C
or
€40,000 x B/12
where—
A is the profit or gains of the new business which would, but for this
section, be charged to tax in the year of assessment,
B is the number of months or fractions of months within the year of
assessment which fall within the qualifying period, and
C is the number of months or fractions of months in the basis period
for the year of assessment.

(5) Notwithstanding any other provision of the Tax Acts, effect shall be
given to a deduction or set-off under subsection (4) in priority to any
relief under section 382 and any allowance made in respect of the new
business in accordance with Part 9.

(6) Where a qualifying individual commences 2 or more new businesses,
the total deduction available under this section shall not exceed
€40,000 for a year of assessment.

(7) Notwithstanding any other provision of the Tax Acts, an individual
who makes a claim under this section shall be a chargeable person
within the meaning of section 959A.”.

ladiesman217

Hi all. When I first heard about this scheme the government was rolling out, the first thing that came to mind was, how much tax will I be paying within the two years. The answer to that is feck all, thats how much. I have been on the BTWEA scheme for over three months now, and I cannot see myself paying much tax within the first year. I've been around to various places such as the local enterprise board, and they just don't give people that provide a professional services any sort of help with regards to grants.

There is the grant that is given by the social protection, which is 75% up to €1000. Now my job requires me to sit at a desk for long periods of time, so you would think that you would need a ergonomically sound chair, but no, this was not deemed pertinent to the business. "you can still run the business without the chair". A good chair is expensive, and a grant for furnishings for my office, within reason of course, would have been of more value to me then a tax break for two years.

Like most of the rules that the government concoct, they never seem to be suitable for the people they are meant for. I wonder was there any collaboration with entrepreneurs, small businesses, people on the BTWEA and people on the live register, to see if this would be a viable option. With the amount of people on our Island, and the advancements in social media and technology, gathering this data would have been easy,and probably would have exposed holes in other governmental rules.

This is the root cause of all government rulings. It is not the rules as such, but the process by which they formulate them, thats what needs to change.

Graham

ladiesman217 wrote: »

Now my job requires me to sit at a desk for long periods of time, so you would think that you would need a ergonomically sound chair, but no, this was not deemed pertinent to the business. "you can still run the business without the chair". A good chair is expensive, and a grant for furnishings for my office, within reason of course, would have been of more value to me then a tax break for two years.

Seriously, you really think there should be a comfy chair grant?

Ikea. Job done.

ladiesman217

Graham wrote: »

Seriously, you really think there should be a comfy chair grant?

Ikea. Job done.

You obviously don't have a job that requires you to work from a desk for long periods. I have got the grant, the money is still there to spend, but as stated, it is not deemed a crucial part of the business function. What are your thoughts on other issues raised within the discussion?

Graham

ladiesman217 wrote: »

You obviously don't have a job that requires you to work from a desk for long periods.

Wrong.

ladiesman217 wrote: »

I have got the grant, the money is still there to spend, but as stated, it is not deemed a crucial part of the business function.

Because it's not a crucial part of the business function, use the money to fund something without which you would be unable to start your business OR use it to fund something that will generate revenue/profit for your business.

ladiesman217 wrote: »

What are your thoughts on other issues raised within the discussion?

The income tax breaks aren't going to be relevant to many new businesses but they are better than no tax breaks.
New business grants are not necessarily the best way of funding new businesses, you will always find recipients who will squander such grants.

stan67

Makes me wonder… Someone who has been unemployed, but registered with social welfare as a qualified adult on someone else's claim (she's not been receiving her own payments but the person whose claim she's on has been getting an increase for her) — would she be eligible for that scheme?

EIREHotspur

Why isn't there ever straight forward advice for Start Ups on any website. Black and White details. ie:

If you start up a Business you will get
xxxx amount on Back To Work Allowance for first year and xxx the second year
On applying for Back To Work you need to show a profit of xx amount to xxxx amount.
you are entitled to xxxx amount from Local Enterprise Board for a website.

Advice on filling out Tax Forms, how to get a Business name etc etc

Instead you meet people who want to put you on Training Courses (They of course earn their wages by teaching you Training Courses) and teach you generalistic nonsense that you can get on the internet or through Business books which is where they got them and bullet point them in Powerpoint.

No such thing as specific help it seems with these people.

Lord TSC

I think as far as the government go, they aren't overly interested in anything which requires them to give out or facilitate the giving out of money. Instead, they offer these courses so they can get their dole figures down. It doesn't matter that Ireland's current unemployed generation are incredibly well trained and educated but just need a helping hand getting started, they just want to get the register down without spending any additional money.