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.

Tax relief for new start-up companies

What?            

Corporation tax relief for new companies in their first three years of trading, up to a maximum of €120,000.   

The relief is equivalent to the amount of Employer PRSI paid by the company, with maximum limits of €5,000 per employee and €40,000 in total per year. Marginal relief is also available on corporation tax liability between €40,000 and €60,000 on a tapering basis.

Unused relief in the first three years, due to losses or insufficient profits, can be carried forward for use in subsequent years.

Why?             

The aims of the scheme are:

• to encourage people to set up businesses
• to make it more likely for early-stage businesses to survive
• to reward job creation in start-up companies

How?             

The relief is claimed through your standard annual tax return (Form CT1) for the first three years of the business. 

More information is available on the Revenue website.

Tips               

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

• The relief is available to companies that pay corporation tax.
• There is no relief for a company with corporation tax liability of €60,000 or greater in any 12 month accounting period.
• The limits of €5,000, €40,000 and €60,000 are proportionately reduced for periods of less than 12 months.
• The relief is not available for companies operating in the fishery and aquaculture sectors, the primary production of agricultural products or the coal sector. The maximum relief over three years is €100,000 for the transport sector.
• The relief is currently due to apply to trades which commence on or before 31 December 2018, but this may be extended.