A Call for More Effective Reliefs for Owner-Managers and Entrepreneurs

Budget 2025 introduced significant changes for business owners and entrepreneurs, but reactions have been mixed. While the proposals to improve entrepreneurs' relief and simplify investment schemes to encourage growth were well-received, the lack of reversal on the retirement relief restrictions outlined in Budget 2024 left many disappointed.

Retirement Relief

The recent budget disappointed owner-managers hoping for improvements in retirement relief. Unfortunately, last year's restrictions, set to take effect on January 1, 2025, were not reversed but instead a 12 year hold was introduced. 

These restrictions lower the ceiling for retirement relief claims on disposals to their children to €10 million for individuals over 70 unless they are held for 12 years. 

This change diminishes the benefits that long-term business owners can reap from years of hard work as they approach retirement. The introduction of a clawback for businesses not held for 12 years is both disappointing as other reliefs tend to have a 6 year clawback in these cases. 

Entrepreneurs' Relief

There's a compelling case to enhance entrepreneurs' relief to better reward the risks taken by business creators. The proposal to link the relief to the payroll taxes generated by the entrepreneur over the business's lifetime is a promising reform. 

This change would not only acknowledge entrepreneurs' contributions to creating employment but also incentivise further entrepreneurial activity within the country. 

Investment Incentives

To truly encourage investment into businesses, it's imperative to overhaul the existing Enterprise Investment Scheme (EIIS) and Angel Investment Schemes. While it is encouraging to see the increase to €10m for the Angel Investment, these programs are currently too complex and pose significant challenges for potential investors. Simplifying these schemes would make them more accessible and appealing, thereby stimulating more investment into the business sector.