Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Deputy Pearse Doherty's argument is that the start-your-own-business relief scheme should be amended to make it available over four years rather than two, that it should provide relief on taxable profits up to €20,000 rather than €40,000 per annum and that it should be extended to new businesses which commence before 31 December 2020, two years longer than that proposed in the Government's extension. Material on take-up of the scheme is only available for the first full year of the scheme, with 1,823 participants in 2014, who include participants who availed of the scheme in 2013. The scheme was available for just two months in 2013 when there were 139 participants. According to Revenue, the estimated cost of the scheme in 2014 was €5.2 million, or approximately €2,852 per individual on average. Recent analysis by Revenue suggests approximately 90% of applicants are earning profits under €20,000. However, it is important to note that we do not have sufficient information to make a judgment on how these businesses may fare in their second or subsequent years.

Extending the scheme, as suggested by the Deputy, could involve considerable costs, as it is unclear how the profits of businesses may evolve. For example, in extending the period during which relief may be claimed to four years as opposed to two, there is likely to be considerable additional costs for the Exchequer in 2019 and 2020 as a result of individuals who commence a trade in 2017 continuing to have exempt income in 2019 and 2020 which otherwise would be taxable. The scheme has already had a higher take-up rate than expected and a higher cost than forecast. It is unclear how fair it would be to continue to assist certain businesses in their third and fourth year, while providing no support for businesses which were not set up by long-term unemployed individuals. It is also unclear how the Deputy's amendment would affect businesses which are already claiming start-your-own business relief.

For these reasons and while I can understand the reasons behind the amendment, I am unwilling to accept it. I highlight the fact that the relief will be available until 2020 for individuals who start their business before the end of 2018. I suggest, therefore, that this issue might be considered again in the future. I see merits in the Deputy’s argument. If I thought it would benefit the scheme, I would accept the spirit of his amendment. However, I do not have enough hard data to know whether his argument is correct. The amendment is about a year premature and I would not rule it out indefinitely. I am prepared to come back to it next year when we will have more data to support the points he has made.