Entrepreneurs unaware of Seed Capital Scheme
A scheme THAT provides financial assistance to workers, the unemployed or those recently made redundant who want to set up new businesses is due to end next year, even though few are aware of its existence.
The Seed Capital Scheme, which currently receives around 70 applications per year, was launched by the Fianna Fáil-led coalition in 1993.
In a statement, the Revenue Commissioner told Metro Éireann that the Seed Capital Scheme supported 237 people to create 199 companies between 2009 and 2011. In total, €18,739.494 was invested in these companies while the scheme paid out €6,690.999 in tax refunds, averaging €58,940 per applicant.
Successful applicants can receive a refund up to a maximum of €100,000 for their investment in a new company.
Revenue explained that the scheme by allowing eligible participants who make a qualifying investment to offset that amount against their taxable income (excluding PRSI) in any of the previous six years. This effectively results in an overpayment of tax, which can be reclaimed as a refund.
“The individual is required to take up full-time employment with the company and to hold at least 15 per cent of the issued ordinary share capital for the required period, normally three years,” Revenue added.
Although the scheme is open to all workers, a spokesperson for the Revenue Commissioner stated that the benefiting company must be a new venture.
Qualifying activities under the scheme are in areas such as manufacturing of goods, certain tourism-related operations, overseas traded services, musical/video recording by a new artist, and recycling.
However, several people contacted by Metro Éireann said they were unaware of the scheme.
“I never heard about it,” said one immigrant who lost his job a few years ago. His views were echoed by an Irish accountant who said he has not been approached by any of his clients regarding the scheme.
Revenue said the scheme is scheduled to end in December 2013, but added that it may be extended for another few years by the Fine Gael-Labour coalition.
