Ivor Callely
Question:221 Mr. Callely asked the Minister for Enterprise and Employment the outstanding recommendations, if any, of the task force on small businesses; and if he will make a statement on the matter. [10538/97]
Written Answers. - Small Business Task Force Recommendations.
The small business task force made 121 recommendations in its report which was published in March 1994. To date, 41 of the task force's recommendations have been fully implemented and substantial progress has been made with the partial implementation of a further 32 recommendations. The following schedule gives details of the remaining 48 outstanding recommendations.
The systematic examination and implementation of these outstanding recommendations is being pursued by the small business and services division of my Department, which has assessed all of the recommendations and is actively pursuing their implementation. In addition, the small business and services forum which I established to advise me on policy issues concerning the development of small businesses and services, in consultation with the small business and services division, has examined those recommendations which remain to be fully implemented and has listed a number of the areas for priority attention during 1997, including administrative simplification and taxation.
I am confident that significant further progress will be achieved this year in implementing the recommendations of the task force.
Schedule
Recommendations of the Task Force Report on Small Business which have not been implemented in full or in part.
1. Delete from the tax refunds for the new enterprise scheme the specific condition that "applicants are disqualified if they hold more than 15% of the capital of any other company".
2. Devise a common format for the business plans submitted to CEBs.
3. If the proposal for the establishment of a campus venture capital fund progresses to fruition, the State should consider giving tax credits for investment in research and development by such companies.
4. Establish a "Third Banking Force", its chief function being the provision of long-term loans to small and medium sized enterprises.
5. The PRSI allowance (£286) should be extended to self employed persons paying the higher contribution rate.
6. The Minister for Finance should appoint an expert group to devise a tax credit scheme to give employers rewards for risk and enterprise, such as personal tax credits for additional jobs created by them.
7. Re-introduce dividend relief for companies in the manufacturing and internationally traded services sectors, with appropriate modifications to counter the type of abuses which were practised by those who qualified for dividend relief prior to its termination in 1992 (because of abuse).
8. Rollover relief should be introduced for business assets acquired by inheritance or gift and subsequently re-invested in another business.
9. Court procedures should be streamlined in order to enable claimants to take action for non-payment of commercial debts more easily and effectively.
10. There is a need for a prompt simplified procedure for commercial debts of up to £5,000 on the lines of the small claims procedure for consumer action.
11. Withholding tax should not be deducted from payments for professional services to enterprises with a turnover of up to £1m per annum and in possession of a valid tax clearance certificate.
12. Withholding tax should not be deducted for payments to limited companies with a turnover of up to £1m per annum, whose Directors are on PAYE, should cease.
13. In the longer term, withholding tax should be abolished for payments for professional services to enterprises who are in possession of a tax clearance certificate.
14. Relevant contracts tax should be deducted at the standard (27%) rate of PAYE.
15. Payment of retirement gratuities to public servants should in future be taxed on the same basis as similar payments to other employees.
16. VAT should be recoverable on a broader range of business expenses. At the time of the Task Force report, EU law stated that VAT should not be deductible on expenditures which are not for business purposes — the Task Force considered that the interpretation of this restriction in Ireland was too narrow.
17. Increases in commercial rates should not exceed the increase in the consumer price index.
18. Start-up business with fewer than 20 employees should be exempt from rates during the first two years of their operation.
19. The option of accounting for VAT on an annual basis should be extended to firms with an annual liability for the tax of up to £10,000.
20. Turnover limits below which annual accounting options are offered to businesses be raised to £5,000 for PAYE/PRSI.
21. The C2 form should not include a personalised photograph.
22. The onus for establishing the tax position and social welfare entitlements of employees should shift to the employee and the relevant Government Department, through the introduction of single ongoing record of the earnings, tax and social welfare position of every employee as well as for claiming benefits and recording details of the cessation or commencement of employment (a re-designed P45 might be suitable for this purpose).
23. Form P60 should be issued by the Revenue Commissioners, who would obtain all the information required to issue such certificate from the P35 return.
24. Abolish emergency tax in favour of a straight deduction of tax at the standard rate where the employee has not provided the appropriate revenue form. Also, abolish the forms dealing with employees on emergency tax.
25. All current forms dealing with disability and occupational injury should be replaced by a single form.
26. Creation of a new category of limited liability for the first two years of operation of new businesses, total registration costs should be £100 and all companies would operate under a common memorandum and Articles of Association supplied by the C.R.O. The promoters would only be obliged to state the company's principal object and its share capital.
27. Link audit requirement threshold to consumer price index.
28. Information obtained by one agency should, if required by another, be exchanged rather than being sought again from business.
29. An expert group should be established comprising representatives of the CSO, the main Government Departments that require administrative returns, and business in order to establish ways of removing the obstacles to the greater integration of administrative and statistical records and surveys.
30. Government Departments and agencies should be required to consult with the CSO when they are establishing new administrative systems or updating existing ones so that the statistical dimension is taken fully into account at the planning and design stage.
31. Voluntary CSO surveys should be clearly presented as such.
32. The annual statutory return of emoluments and numbers employed which companies covered by the FÁS training levy/grant schemes must complete should be replaced by a copy of the employer's annual P35 return, which should be amended to give a breakdown of the number of males and females employed (this information is required by FÁS).
33. Where an employer has fewer than 20 employees, the burden of proof under the Unfair Dismissals Acts, 1977 and 1993 should henceforth be neutral as between employer and employee.
34. The qualifying service period for eligibility under the Unfair Dismissals Acts, 1977 and 1993 should be two years for employees employed in enterprises with fewer than 20 employees.
35. Other than for maternity legislation, workers should qualify for the protections of labour legislation only when they work 18 hours or more per week. The threshhold for maternity legislation should remain at 8 hours per week.
36. The Payment of Wages Act, 1991 should be amended to remove the entitlement of serving employees to payment in cash provided that the alternative payment method proposed by the employer imposes no additional cost on the employee.
37. Introduction of a permit system, which would be operated by the Health Boards, for "cottage industries" engaged in the making of basic foodsuffs. The cost of such permits should not exceed £10 and would be valid for 3 years. Structural requirements for compliance with the Food Hygiene Regulations would also reflect the small-scale nature of the businesses concerned.
38. Manufacturing and international services businesses coming under the aegis of Forbairt, or the regional bodies of SFADCo and Údarás na Gaeltachta, should be allocated an executive in the relevant agency to serve as a contact point for their dealings with the State agencies as a whole.
39. Public sector bodies who do not have a qualified professional in purchasing should appoint one on an initial contract of 3-5 years duration.
40. Public Purchasing Officials should in future approach their role in a more active and dynamic fashion.
41. Due to an apparent inadequate understanding of EU public procurement directives, better and more training on EU law for purchasing officials is recommended.
42. Emphasising factors such as quality, value for money, reliability and after-sales service should be part of the criterion that applies to purchasing policy as opposed to the current criterion of lowest price which applies too narrow a perspective to purchasing policy.
43. Public sector contracts should be made more accessible to small firms, and work done by the DTI in the UK should be studied and emulated by the Department of Enterprise and Employment and by the new company recommended.
44. Increase public sector commitment to encourage and assist Irish suppliers to access public procurement.
45. Department of Enterprise and Employment to consult with the Revenue Commissioners to ensure VAT returns are used to develop a proper statistical profile of the broad spread of enterprises in this country.
46. Department of Enterprise and Employment to undertake studies on business failures including causes.
47. Small Business Division, after consultation with the Small Business Forum, should prepare an annual report on small business in Ireland.
48. Before legislative or other measures likely to affect small business are proceeded with, a full and systematic analysis of their impact on small enterprises should be undertaken.