Written answers

Tuesday, 5 November 2013

Photo of Lucinda CreightonLucinda Creighton (Dublin South East, Independent)
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163. To ask the Minister for Finance the measures in place to ensure that legitimate tradespeople in the construction industry are protected against those who have started their new business and will be paying no income tax for two years; his views that the margins of the non-income tax paying trader will be able to generate will mean that they can undercut pre-existing traders. [45937/13]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, I announced the Start Your Own Business incentive in the recent Budget. This incentive is an exemption from Income Tax for individuals who have been long-term unemployed and start a new, un-incorporated business. The individual must have been continuously unemployed for a period of at least 15 months prior to setting up the business. Time spent on certain courses such as FÁS courses will qualify as periods of unemployment for the purposes of this scheme.

An exemption from Income Tax will be provided on profits up to a maximum of €40,000 for the first two years of trading. However, USC and PRSI will continue to be payable. If a loss is incurred then loss relief will be available in the normal manner.

The business must be un-incorporated i.e., the individual must be a sole trader. In order to claim this relief, the individual must file a tax return notwithstanding that there may be no liability to tax.

This incentive is an employment activation measure that provides a much-needed incentive for people to start their own business and to reduce their dependence on welfare payments. Any measure that will reduce unemployment and encourage entrepreneurship is to be welcomed.

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