Dear Members and Colleagues,
Yesterday we saw the Government announced the long-awaited July Stimulus package. Below are the key points announced for business:
A new Employment Wage Support Scheme will succeed the Temporary Wage Subsidy Scheme and run until April 2021.
- The extension of the wage subsidy scheme and the rates waiver is very welcome and will help businesses minimise their cash burn during this period of restricted trading. The figures suggest that the TWSS is being reduced in scale, which will transfer a great burden for wage maintenance to the employer. The rates waiver needs to be longer.
A €2 billion COVID-19 Credit Guarantee Scheme
- The €2bn Credit Guarantee Scheme is an extension of an existing facility which has not proved popular among businesses to date, with only a 13% draw-down since 2012.
Restart Grant for Enterprises is being extended and expanded
- An increase of €300 million in grants is too small, given ISME estimated an €11 billion hole in the balance sheets of SMEs. This grant remains tied to rates, so non-rateable businesses do not qualify. We wanted to see a far larger deployment of grants, at a scale similar to the German Federal Government.
- VAT reduction of the 23% rate is temporary- we believe the top rate is too high in the base case and this should be permanent. In any case, this reduction only kicks in in October.
- The early carry-back of 2019 corporation tax is good, but most SMEs don’t generate a lot of corporation tax anyway.
In summary, of the €7.4 billion in the July Stimulus, €2.6 billion is worker income support, €2 billion is debt, and €1.6 billion are tax/rates measures. Grant assistance is an additional €300 million, or 4% of the total. We believe this to be far too low.
In other news, you may already have completed our COVID-19 survey but if not, we would urge you to fill out and if possible, share the short survey today. This is the third time we have run this survey and your input is very much needed. The previous two surveys have informed our lobbying to date on this subject. Take the survey HERE
The next issue of the bISME will be out the end of August/start of September. If you wish to get involved by sharing an opinion or taking an advert please email [email protected].
ISME Skillnet are still providing free webinars to help SMEs in these difficult times. Next week they will run the following three-part series, which might be of particular interest to those of you or your friends and family who are out of work due to COVID-19: ‘Getting Hired in a Virtual World’. Find out more and register here.
ISME Skillnet is also offering a free Business Advisory Service to help business owners relaunch their business in a confident and organised manner. The service consists of 6 hours of mentoring with a professionally qualified business coach, carefully selected by ISME. If interested, please contact Adam at [email protected]
We are keeping our Back to Business portal updated with advice, information and discounts to help you and your business. Members can include adverts and offers in the portal for free. You can find out more about getting involved here
- This week we have updated our COVID-19 FAQs with information about staff travel and quarantine. Read here
- Added information about the much-awaited Green List. Read here
- Uploaded and added notes on V17 of the WSS FAQs. Read here
Despite the Government’s €7 billion action plan, tough times are still ahead for SMEs and we will still need you to keep the pressure on your local representatives. It can’t be underestimated the power of each and every one of us in keeping Coronavirus down and the economic recovery up. Show leadership in your community and in your business, wear a face mask, keep your social distance and continue to promote good hand hygiene. If you have not already done so then please downloaded the COVID Tracker app, this will help us to protect each other and slow the spread of COVID-19. Read more and download here.
I’ve said it before but we need the COVID-19 crisis to end as soon as possible, so all of us will have to play our part in avoiding a second wave, and avoiding a second lockdown.