SFA E-Zine – The Tuesday Edition
 

Dear Member,   

In this week's e-zine, we advise on what you need to know about fixed term contracts.

Each week in the SFA e-zine, we profile a different government support available to small businesses. In this edition, we focus on the R&D Tax Credit, where you can get 25% of your R&D spending back as a tax credit.

We bring you an update on the late payment interest rate and on changes to the Leaving Certificate grading system effective from August 2017. Also find details of the European Entrepreneurial Region 2018 which has been awarded to the northern and western regions of Ireland.


Book your place at the next SFA webinar on 26 July on government supports for small business and save the date for the SFA Employment Law Conferences taking place this year in Limerick and Dublin. Take part in the SFA Village at the Your Business Live event on 17-18 October and you can now buy your tickets for the SFA Annual Lunch 2017 taking place in the Mansion House on 10 November. Give your business the competitive edge by upskilling yourself and your staff through our upcoming training courses


As always, we’d love to hear from you about any queries you may have, issues you wish to have raised with Government or other stakeholders and your ideas on how we can improve the business environment for us all. Please contact me on tel: 01 605 1626 or e-mail: linda.barry@sfa.ie or tweet: @SFA_Irl or visit: www.sfa.ie.


Kind regards, 

Linda Barry

SFA Acting Director


SFA IN THE MEDIA
Recent press coverage
 
  • National Minimum Wage
  • Irish Brokers Association Market Day
  • Investment in small firms 
  • SFA Awards
  • Your Business Live

National Minimum Wage

The SFA issued a press release today (18 July) criticising the Low Pay Commission's recommendations to Government on the National Minimum Wage. SFA Acting Director, Linda Barry was interviewed on the topic on Newstalk Breakfast on 12 July debating against Jimmy Kelly of Unite.

Irish Brokers Association Market Day

SFA Chair, Sue O'Neill delivered the opening address at the Irish Brokers Association Market Day in the RDS on 8 June. This was covered in the Irish Broker on 17 July. 

Investment in small firms increasing despite Brexit concerns

The SFA issued a press release on new data launched regarding the finance and investment priorities of small firms on 8 June. This week this was covered in The Daily Mail on 15 July. 

SFA Awards

Ventac, overall winner of the SFA National Small Business Awards 2017 featured in The Sunday Business Post on 16 July. 

Your Business Live

SFA is a partner on Your Business Live, a two day event taking place in the RDS on 17 & 18 October 2017 where entrepreneurs, owners and managers will gather to network, learn and keep up to date with the latest trends and hottest new products and services for their business. Facebook have just been announced as a co-sponsor of the event. This was covered in the Irish Independent, Businessworld.ie and Adworld.ie

NEWS
Fixed term contracts- What you need to know
 
The main advantage of a fixed term or specified purpose contract is that they allow for the termination of the contract once the fixed term or the specified purpose has been completed. Generally, a fixed term contract ends on an agreed date and this is stated in the contract...

The main advantage of a fixed term or specified purpose contract is that they allow for the termination of the contract once the fixed term or the specified purpose has been completed. Generally, a fixed term contract ends on an agreed date and this is stated in the contract. By contrast, a specified purpose contract is used in situations where the termination date is not definable in advance. It is suitable where a person is employed as a replacement for someone who is absent due to illness/maternity leave or if someone is employed to work on a particular project.

 

Rights of employees

 

Employers should ensure that they fully understand the rights of employees on fixed term or specified purpose contracts as set out in Protection of Employees (Fixed Term Work) Act, 2003. It is important to note that if an employer wishes to renew an employee’s fixed-term/ specified purpose contract that they must provide the employee with a written statement, not later than the date of renewal, setting out the objective grounds justifying the renewal and the reasons why the company was unable to offer a contract of indefinite duration.

 

Obligations of employers

 

There are some limitations on the use of fixed-term/specified purpose contracts and if an employee has been employed on two or more continuous fixed-term contracts, then the total duration of those contracts may not exceed four years. After this, the employee becomes entitled to a contract of indefinite duration unless the employer can justify a further fixed term contract being issued on objective grounds. The Unfair Dismissals Act 1977-2015 also contains a provision to prevent the abuse of fixed-term contracts by employers.  The Act provides that where a fixed-term or specified purpose contract expires and the individual is re-employed within three months, the individual is deemed to have continuous service. However, the Workplace Relations Commission may even look beyond this three month threshold if they feel that the employer’s aim in breaking the employee’s service was to avoid the legislation.

 

The SFA have published a guideline on employing fixed term workers .For further information, contact Ciara McGuone on 01 605 1668, or ciara.mcguone@sfa.ie.

Get 25% of your R&D spending back as a tax credit
 

Spotlight on the R&D Tax Credit, a corporation tax credit worth 25% of your R&D expenditure if your activities pass the accounting and scientific tests. This article provides information on the scheme and advice on how to apply...


There are over 80 different government supports available to small businesses but many of them are not well known or understood. Each week in the SFA e-zine, we will profile a different support that could improve your business, giving you information and advice.

R&D tax credit

What?

A scheme whereby companies engaging in scientific or technological research and development can offset 25% of their R&D investment against their corporation tax liability.

In order to receive the tax credit, the company must be engaged in qualifying activities (the scientific test) and incur qualifying expenditure (the accounting test). 

There are a number of ways the credit can be used:

  • Offset against the company’s corporation tax liability in the current year
  • Offset against a previous year’s corporation tax liability, which may result in a refund to the company
  • Unused portion can be refunded over a three year period

The science test

The activities must seek to achieve a scientific or technological advancement that must involve the resolution of scientific/technological uncertainty.

A process, material, device, product, service or system does not become an advance in science or technology simply because science or technology is used in its creation.

The R&D can be classified as basic research, applied research or experimental development. The solution cannot be reasonably available to a competent professional in the field.

The accounting test

Qualifying expenditure may come under a variety of headings:

  • Direct staff costs
    • For those involved in the R&D – portion of wages, employer PRSI, any reasonable bonuses or pension contributions paid on behalf of employees
  • Raw materials
  • Direct overheads
    • Additional costs over and above normal cost of production
  • Plant and machinery
    • Proportion of the up front cost that can be claimed is the proportion of the use of the plant/machinery for R&D
  • Sub contracted R&D costs (subject to certain rules)
    • Subcontractors could be third parties or third level institutions
    • In certain circumstances only, and subject to a limit of whichever is the higher of €100,000 or 10% of the total (5% if subcontractor is a third level institution)
  • Computer software and hardware costs
  • Buildings (special improved rules apply)
  • Fixtures and fittings
  • Other

Why? 

The aim of the scheme is to incentivise R&D activities in private companies. Innovation is widely recognised as a key ingredient of economic and business success across all sectors of the economy.

The level of innovation in small firms in Ireland is slightly higher than the EU average but well off the top of the rankings. Furthermore, indigenous small firms are significantly less likely to innovate than their foreign-owned counterparts.  

How? 

Companies can make the claim directly to Revenue and must keep all related documentation for at least four years.

Revenue may:

  • Approve the tax credit and offset it against the corporation tax liability or repay the amount over the subsequent three years
  • Query the claim and review the financial calculations (query the accounting test)
  • Query the claim based on the scientific test, sending a form with 23 questions to the company
  • Conduct an onsite audit
  • Conduct an onsite audit and query both the scientific and accounting aspects of the claim

Tips

If you are interested in applying, don’t forget:

  • The credit is available to companies only
  • The claim must be made within 12 months of the end of the accounting period in which you incurred the expenditure
  • It is important to keep good records to validate your claim if needed. These include staff timesheets, project notes, internal memos, emails, board meeting minutes, project budget forecasts, goals documented, lab notes, records of milestones etc.
  • All activities must be carried out by the claimant company (apart from subcontracting)
  • Projects should be organised, systematic and structured and must be managed by suitably qualified experts
  • To listen back to a webinar on the R&D Tax Credit delivered to SFA members by Mazars tax experts and view the accompanying slide deck, click here. Guidelines and FAQs are also available on the Revenue website

SFA Webinar - Government Supports

SFA Acting Director, Linda Barry will deliver a webinar on 26 July from 2:15pm - 2:45pm on 'The what, where and how of grants, loans, tax savings and other government supports.' Register online now for the webinar.

Late payment interest rate – July 2017 update
 

The late payment legislation allows businesses to automatically levy penalty interest on late payments in business-to-business transactions. As of 1 July 2017, the current rate is 8.00%, which equates to a daily rate of 0.022%...


The late payment legislation allows businesses to automatically levy penalty interest on late payments in business-to-business transactions, i.e. where payment is not received by the due date agreed in the contract or after 30 days where there is no contractual payment period specified.

Under the Late Payment in Commercial Transactions Regulation, interest at the rate of the European Central Bank rate plus 8% will apply to payments made after the 30-day payment period has expired (in the absence of a written contract specifying an alternative payment period). 

As of 1 July 2017, the current rate is 8.00%, which equates to a daily rate of 0.022%. This is based on the ECB rate (as at 1 July 2017) of 0.00% plus the margin of 8%.  Penalty interest due for late payments should be calculated on a daily basis.

The full SFA Late Payments Guideline is available here.

Changes to the Leaving Certificate grading system effective from August 2017
 
The Department of Education and Skills has introduced changes to the Leaving Certificate grading system which will become effective this year. It is important that employers are aware of the revised grading system in advance of job applications being submitted from the school leavers of 2017...

The Department of Education and Skills has introduced changes to the Leaving Certificate grading system which will become effective this year. It is important that employers are aware of the revised grading system in advance of job applications being submitted from the school leavers of 2017. The changes introduce a new 8 point Leaving Certificate grading scale, replacing the previous 14 point scale. The table below illustrates the main changes between the old and new grading systems. Further information can also be found at www.transition.ie

 

New Leaving Certificate Grading Bands

H1 / O1≥90 and ≤ 100
H2 / O2≥80 and < 90
H3 / O3≥ 70 and < 80
H4 /O4≥ 60 and < 70
H5 / O5≥ 50 and < 60
H6 / O6≥ 40 and < 50
H7 / O7≥ 30 and < 40
H8 / O8≥ 0 and < 30

 

How pre 2017 Leaving Certificate grading and new Grade Scheme bands align

Pre-2017 Grade Scheme% marks 

New Grade Scheme 2017

(Higher / Ordinary)

A190 - 100 ≥90-100 H1 / O1
A285 < 90 ≥80 <90  H2 / O2
B180 < 85
B275 < 80 ≥70 <80   H3 / O3 
B370 < 75
C165 < 70 ≥60 <70  H4 / O4 
C260 < 65
C355 < 60 ≥50 <60  H5 / O5 
D150 < 55
D245 < 50 ≥40 <50  H6 / O6 
D340 < 45
E25 < 40 ≥30 <40 H7/O7
F10 < 25  0 < 30 H8/O8 
NG0 < 10
European Entrepreneurial Region 2018 awarded to Northern and Western Regions of Ireland
 
Minister Pat Breen T.D welcomed the EU decision on 11 July to award Ireland’s Northern and Western Region as European Entrepreneurial Region 2018. The counties involved are Donegal, Mayo, Galway, Sligo, Roscommon, Leitrim, Monaghan and Cavan...

Minister Pat Breen T.D welcomed the EU decision on 11 July to award Ireland’s Northern and Western Region as European Entrepreneurial Region 2018. The counties involved are Donegal, Mayo, Galway, Sligo, Roscommon, Leitrim, Monaghan and Cavan.

Minister Breen met with local businesses and entrepreneurs on his visit to the Local Enterprise Office in Galway and emphasised the importance of start-ups and small business to the rural economy. The EER project identifies and rewards EU regions and cities that show a remarkable and innovative entrepreneurial policy strategy regardless of their size, wealth and competences.

The action plan is based on the 10 principles of the EU Small Business Act identifying few remaining gaps and listing steps, targets and deliverables to be achieved during the EER year 2018. It includes innovative actions, such as capitalising on the National Ploughing Championship – Europe's biggest agricultural exhibition – to promote entrepreneurship in rural areas, or targeting Irish emigrants through an awareness raising campaign implemented in the regional airport.

Minister Breen commented: “This award is a tangible demonstration of the fact that entrepreneurship and the appetite for more start-ups in Galway and the surrounding counties is alive and well. It is also a testament that the LEOs – working with other agencies and organisations – are central to delivering on the ambition of helping people to help themselves, building a culture of entrepreneurship and enterprise, delivering jobs in every county in Ireland.”

Find out more about the project here

EVENTS
SFA Webinar - Government supports for small firms
 
  • 26 July

SFA Acting Director, Linda Barry will deliver a webinar on 26 July from 2:15pm - 2:45pm on 'The what, where and how of grants, loans, tax savings and other government supports.' 

Small businesses are missing opportunities to avail of government supports for their business due to lack of information and confusion. Understanding what supports your business qualifies for, where to apply for them and how to avoid some common pitfalls could be the key to sustaining your business or taking it to the next level. 


The webinar will cover:

  • the "Supporting SMEs online tool"
  • the various agencies that assist small business and their criteria
  • government policy incentives for starting and growing a business in Ireland
  • funding opportunities for small business, including SBCI, Microfinance Ireland and the Credit Review Office
  • enterprise space, training & mentoring, advice and promotional opportunities

There will also be a special focus on Brexit supports for small business to help you to assess the risks posed to your business by Brexit and navigate the challenges that have already arisen or may develop under different scenarios.

You will also have the opportunity to ask questions.

Register online now for the webinar.

After registering, you will receive a confirmation email containing information about joining the webinar. If you can't make this time, you can still register for the session and we'll send you a link to the recording afterwards so you can playback in your own time.

Save the date - SFA Employment Law Conference
 
  • Limerick - Castletroy Park Hotel - 20 September 
  • Dublin - Clontarf Castle - 9 October 

Book now - SFA Annual Lunch 2017
 
  • 10 November
  • The Mansion House

The SFA Annual Lunch is the highlight of the small business calendar. It is an opportunity to celebrate the contribution that small businesses make to the Irish economy and society.

The SFA Annual Lunch 2017 will take place in the Mansion House in Dublin on Friday, 10 November from 12:30pm - 4:30pm. 

Join over 500 guests, including small business owner-managers, politicians, senior government officials and media for the biggest business lunch of the year for small business. This is also the perfect opportunity to bring together your invited guests, special customers, clients and valued employees to kick off the festive season.

Member rate of €750 + VAT for a table of 10 or €75 + VAT - book your tickets online now

Be part of the SFA Village at Your Business Live
 
  • Showcase your business at Ireland's largest SME event - 17- 18 October

As partner of Your Business Live – Ireland's largest SME event, brought to market by The Irish Independent, the SFA plan to create a village whereby our members can come together to showcase their products and services at a preferred rate.

Your Business Live is a two day event taking place in the RDS on 17 & 18 October 2017 where entrepreneurs, owners and managers will gather to network, learn and keep up to date with the latest trends and hottest new products and services for their business. The event will attract in excess of 20,000 executives and decision makers who are looking to meet suppliers, source products and learn from an inspirational line up of speakers across four key stages, (Tech, Grow your business, Finance, Talent & HR).

 

We are delighted to offer our members the below preferential rate for exhibition space:

  • €260 per sq.m to include shell

  • 4 Sq.m. stand €1040

  • 6 Sq.m. stand €1560

  • 8 sq.m. stand €2080

Space only can also be arranged. Download a copy of the exhibitor brochure here and the floorplan hereTo book your stand please contact Celene Duffy 0872858421 or cduffy@independent.ie stating that you would like to be part of the SFA Village. 

TRAINING PROGRAMMES
Give your business the competitive edge by upskilling yourself and your staff
 

Don’t miss the opportunity to develop key skills for yourself and your staff before the end of 2017 with training courses available from the SFA: Foundations in Management, Project Management and Performance Management and Appraisal Skills. The SFA offers training courses tailored to small businesses - check out the ‘Unlock your potential 2017’ brochure...


Throughout 2017, the SFA is focusing our course offering on the areas that will most benefit a small business. No matter what stage of development your business is at, these courses are designed to address your needs. Based on your feedback, the courses are short and are offered at very reasonable rates.

Avail of the training opportunities presented in the SFA ‘Unlock your potential 2017’ brochure to bolster your competitiveness and equip your business for the future.

Next available courses:

  • Foundations in Management, two-day course, 7-8 September or 23-24 November, Dublin, €370 for SFA members
  • Project Management, one-day course, 15 September, Dublin, €190 for SFA members
  • Performance Management and Appraisal Skills, one-day course, 14 December, Dublin, €190 for SFA members

To book your place, visit www.sfa.ie/events .