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Tax breaks and credits called for in Covid plan 

Self-employed under pressure 'should get €10,000 concession'

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Closed: Face masks and rubber gloves on statues beside the Oliver St John Gogarty pub in Temple Bar, Dublin. PHOTO: GARETH CHANEY/COLLINS

Closed: Face masks and rubber gloves on statues beside the Oliver St John Gogarty pub in Temple Bar, Dublin. PHOTO: GARETH CHANEY/COLLINS

Collins Dublin, Gareth Chaney

Closed: Face masks and rubber gloves on statues beside the Oliver St John Gogarty pub in Temple Bar, Dublin. PHOTO: GARETH CHANEY/COLLINS

Self-employed workers financially squeezed by the pandemic should get a tax write-off of up to €10,000 as part of broader measures to help more than one million workers in the SME sector, experts have suggested.

The call comes from a group representing the country's accountancy bodies in a pre-Budget submission.

The new Government is preparing to roll out a major stimulus package next week designed to help the battered economy get back on track.

And an accountancy group has warned that without further extraordinary supports, many SMEs "cannot survive".

Tánaiste Leo Varadkar has vowed the multi-billion stimulus package will be "radical and far-reaching". The Government will also publish a national economic plan alongside October's Budget.

In its submission, the Consultative Committee of Accountancy Bodies - Ireland claimed that many self-employed people will not be in a position to pay their income tax liability when it falls due in November.

The group is proposing that the first €10,000 of whatever the balance is of their 2019 tax liability is subject to a write-down. It says the measure could be targeted at those in financial difficulty and would be a "highly effective" means of support.

It is also asking Government to address tax liabilities that people in receipt of the Temporary Wage Subsidy Scheme and the Pandemic Unemployment Payment will have.

The representative body said that someone receiving the €350-a-week payment under the wage subsidy scheme will have received a total of €7,700 over a 22-week period.

It argued that that is a substantial amount of untaxed income for a worker to have to deal with at the end of the year. "Tax due on these payments should be spread over four years or more to avoid a significant drop in the worker's take-home pay," the body suggested.

"When we talk about small businesses, we mean local retailers, manufacturers, hospitality, and service providers," said Norah Collender, professional tax lead at Chartered Accountants Ireland.

"They are reeling from the economic impact of Covid-19 and face liquidity pressures which could result in business closures without Government support.

"The tax system is a powerful means of getting supports to SMEs, which in turn always respond positively with increased economic activity."

The submission to Government also calls for the tailoring of research and development tax credits, the introduction of a digital tax credit for SMEs, and a refinement of the Employee Incentive and Investment Scheme rules to boost equity funding for SMEs.

Separately, accountancy and professional services firm Deloitte has called for more supports for family-owned business to prevent a "corrosive" failure rate later in the year.

Irish Independent