‘Action Plan for SMEs’ required to provide urgent clarity and support
91% of CPA accountants believe that the Wage Subsidy Scheme should be extended
78% of CPAs believe further initiatives are required from Government
Revenue Pay and File deadline should be extended
RTE News Coverage: https://www.rte.ie/news/business/2020/0604/1145434-more-government-support-needed-to-sustain-smes-cpa/
CPA Ireland, whose members advise over 100,000 Irish SMEs, have called for an ‘Action Plan for SMEs’ to be prioritised in Ireland’s post-COVID recovery. CPA Ireland say the country’s small and medium businesses need greater clarity and a focussed plan to facilitate recovery.
In a recent survey, CPA Ireland members identified several priorities for SMEs. This included the extension of the Temporary Wage Subsidy Scheme to September 2020, moving the Revenue Pay and File deadline to later in the year and targeted tax measures to support those industries most impacted by Covid-19.
Highlighting the need for an Action Plan for SMEs, 78% of CPA Ireland members believed that further initiatives will be required by government to sustain businesses in the long term. While only 50% feel that the current supports already being provided are sufficient to support SME’s current needs.
Gearóid O’Driscoll, President of CPA Ireland, commended the initial efforts put in place to support SMEs but said it is now time to move to the next phase. “We need to get out of the bunker and focus all of our economic efforts on enabling businesses to recover. The initial response was swift and positive. However, many difficulties have been identified in accessing state supports, particularly by SMEs.”
“There is a sense that the ever-increasing array of initiatives is causing confusion and more attention needs to be given to ensuring existing schemes are fit for purpose. While the intention is laudable it is creating confusion, an Action Plan for SMEs would address this and send a powerful message to the population of over 1 million people who work in SMEs that the government is behind them.
While almost 95% of CPAs surveyed have clients accessing the state schemes, they have identified various challenges in doing so. “Lack of awareness among SMEs is one of the key challenges and reinforces the need for a concerted plan” O’Driscoll stated. “For example, 42% of respondents said that the majority of clients were unaware of the Enterprise Ireland Sustaining Enterprise Fund. Meanwhile approximately one in five said that both the Credit Guarantee Scheme and SBCI Working Capital loan were too complex for SMEs to access. Limiting the burden of the bureaucracy and red tape must be addressed.”
President Gearóid O Driscoll welcomed the extension to October of the deadline for filing of annual returns with the Companies Registration Office and is requesting the Revenue Commissioners also to consider similar measures. An extension to the Pay and File Deadline beyond October was identified by survey respondents as the most important support that could be put in place by the Revenue Commissioners to assist SMEs.
Mr O’Driscoll explained the reasoning for such an extension “The upcoming Pay and File deadline in October of this year will result in tax liabilities for many taxpayers as they are required to pay tax on profits for 2019. This will in turn place further pressure on already tight cashflows for many businesses."
“At a time when most SME owners should be focussed on keeping the lights on, they do not need the distraction of arbitrary deadlines. We are therefore asking the Revenue Commissioners to continue to show solidarity with SMEs, through providing an extension to the Pay and File deadline until at least December 2020 together with measures to assist taxpayers with payment of any Income Tax liability that arises. This will allow businesses more opportunity to recover and time to focus on the immediate challenges at hand. The earlier extensions are communicated the more it will ease the pressure off business owners.”
“The Temporary Wage Subsidy Scheme was a welcome measure introduced by Government, in response to the crisis, in assisting employers retain links with employees for when business picks up, according to O’Driscoll. “However, the speed with which it was introduced has meant that it too is not without frustrations, with 45% of respondents saying that their clients had encountered administrative difficulties in accessing the scheme.”
“Extending the Wage Subsidy Scheme was identified as one of the important measures the Government must undertake to support SMEs. There is a recognition that this cannot go on for ever, with the COVID-19 restrictions in place for several more months, an extension to September would provide comfort to businesses and empower them to focus on returning to stability.”
Concluding, President Gearoóid O'Driscoll reiterated his call for an Action Plan, “There are many measures that have been put in place, all of them well intended. What we need now though is a clear short, medium-and long-term plan that will deliver an all of Government and all of society approach to getting our SMEs back to stability. We hope that Government will heed this call and as the advisers to the 100,000 SMEs that CPAs support, our membership will actively work with Government to aid the recovery of the economy.’