Small business, start-up & innovation supports confirmed

The Government has announced a number of supports to help smaller businesses as part of Budget 2025.

"Businesses, both large and small, are the life-blood of our economy, and this Government is committed to supporting businesses so they can continue to grow, innovate, and create employment," Minister for Finance Jack Chambers said in his Budget speech.

On the Research and Development (R&D) tax credit, there will be an increase in the first year payment threshold from €50,000 to €75,000.

Minister Chambers said this will provide further support to companies undertaking smaller R&D projects or engaging with the credit for the first time.

The Government has also announced the extension of three business schemes which help companies attract funding.

The Employment Investment Incentive, the Start-Up Relief for Entrepreneurs and the Start-Up Capital Incentive will be extended for a further two years, to the end of 2026.

Meanwhile, the amount an investor can claim relief on under the Employment Investor Incentive will be doubled from €500,000 up to €1 million.

The relief under the Start-Up Relief for Entrepreneurs scheme will increase from €700,000 to €980,000.

There will be an amendment to the Capital Gains Tax relief targeted at investors in innovative start-ups.

It will provide for an increased lifetime limit on gains to which the relief applies from €3m to €10m.

The relief, which was announced last year, will begin "shortly", the Minister said.

Minister Chambers said international developments and commitments have seen "significant complexity" added to the corporation tax code in recent years.

As a result, the Government is introducing a participation exemption for foreign dividends.

The measure will come into effect from 1 January next year.

"It will provide an alternative, much simplified mechanism for double tax relief for multi-national businesses," he said.

"Work will continue in the coming year on participation exemptions, including further consideration of geographic scope and of a foreign branch exemption," he added.

The Government has also announced changes to the section 486C small company start-up relief from corporation tax by introducing a new method for companies to qualify for the relief by reference to Class S PRSI.

This will extend the scope of the relief to small owner-managed start-up companies.

For businesses scaling-up, there will be a new relief for expenses incurred in connection with a first listing on an Irish or European stock exchange, subject to a cap of €1m.

In the coming year, Minister Chambers said the Department will introduce a Stamp Duty exemption, subject to State Aid consideration.

"This measure would enable Irish SMEs to access equity via financial trading platforms designed to support their funding needs," he said.

Minister Paschal Donohoe announced a €170m Energy Subsidy Scheme for hospitality and retail businesses which have been impacted by rising energy costs.

The Minister said this will provide support to about 39,000 firms.

He also announced an investment of over €1 billion in the Department of Enterprise, Trade and Employment's Jobs and Enterprise Development Innovation and Commercialisation and Regulation programmes for next year.

Capital funding will also be available to enable IDA Ireland and Enterprise Ireland to provide additional environmental aid for their clients.