The Small Firms Association has launched a campaign to have the Government end discrimination against self-employed and Proprietary Directors in the tax and social welfare systems in 2015.
The campaign has been launched by the organisation’s chairman, AJ Noonan, who says there is a real need to support people in embarking on their entrepreneurial journey, “as without the risk-taker / the owner-manager, no jobs can be created”.
“Therefore it is important that they are at least treated equally if not indeed more preferentially than employees,” said Mr Noonan.
Specifically, the SFA is advocating the introduction of its three point plan by Government to introduce a voluntary PRSI rate for the self-employed, to equalise how self-employed/ proprietary directors and employees are treated and to introduce a CGT rate for entrepreneurs selling their business.
“The PRSI rate should enable them to claim unemployment benefit should their business fail and would alleviate some of the risk associated with starting up a business. The scheme should run on an opt-in basis for already established businesses.
“Specifically the additional 3% USC on earnings above €100,000 for self-employed must be abolished. This was promised by the end of 2014, but the Government failed to deliver on this commitment in Budget 2015. In addition, the PAYE tax credit should be available to all who pay tax on a PAYE basis. Currently a self-employed person on €15,000 is six times worse off than the equivalent employee, because of this discrimination.
“For example, in the UK, you only pay 10% CGT if you sell or close all or part of a business, on condition you’ve held the share for at least a year and you are a director, partner or employee in the business. The existence of such a scheme in our closest competitor economy means that business HQs here will be moved to the UK prior to sale with the consequent loss of jobs here. Introducing a comparable rate here would give a tremendous boost to business sale and acquisitions activity.
“By focusing on the entrepreneurial sector, we can deliver real national and balanced regional growth. However this will only be possible if the Government implements our three-point plan,” he said.