Start Up Tax Relief

ByLalor And Company

Starting a new business can be tough. Fortunately there are some tax relief programmes for new business in Ireland that can really make a difference when you’re getting started.

Am I entitled to any tax relief when starting up a business?

Once you have started to trade, you may be able to claim a tax deduction for certain expenses incurred in respect of the business.  For tax purposes, these expenses are treated as if they had been incurred at the time that the trade started.

These may include;

  • Business-related leasing costs

  • Legal fees

  • The cost of preparing business plans and feasibility studies.

According to the Revenue, if you have started a new company, you may be able to apply for tax relief for start-up companies.

“This tax relief, also known as Section 486C tax relief, is a reduction of your Corporation Tax (CT) for the first three years you trade. … You may be entitled to relief if your CT due is €40,000 or less in a tax year.”

Start up company corporation tax relief

Finance Act 2015 extended the 3-year start-up exemption for a further 3 years such that it will apply to new business start-ups which commence in 2016, 2017 and 2018.

This extension means the relief will benefit all “qualifying trades” that commence on/before 31 December 2018.

The legislation is keen to point out that  a “qualifying trade” does not include a trade:

  • which was previously carried on by another person or a company

  • which involves dealing in or developing land

  • which involves the exploration and extraction of natural resources

  • which involves the carrying on of a profession or the provision of a professional service

  • which involves the holding of an office or employment;

The 3-year start-up exemption is available where the total amount of corporation tax payable by a company for a 12-month accounting period falling within the 3 year start-up period does not exceed €40,000.

Marginal relief is granted on a tapering basis where the total amount of corporation tax liability for the accounting period is between €40,000 and €60,000.  

However, the relief will be limited to the amount of Employers’ PRSI paid by the company.  This amount may be reduced if the company pays over the relief limit of €5,000 per Employee.

HOW CAN LALOR & COMPANY PROVIDE HELP YOU?    

With over 30 years’ experience advising on liquidity, cash flow and debt issues, we are well placed to advise you on the best options available. We have extensive experience dealing with banks and other credit institutions and can help navigate your business to success.



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