27 Aug 2019 | 02.31 pm
Business Confidence Strong Despite Brexit
But entrepreneurs want tax reform, KPMG survey finds
27 Aug 2019 | 02.31 pm
The impending Brexit deadline has not significantly dented business sentiment, with two in three entrepreneurs expecting turnover growth in their companies over the next 12 months.
The business sentiment insights come from KPMG, which commissioned Red C to survey a sample of entrepreneurs in July. Red C’s methodology for the survey was telephone calls to decision makers in 150 firms with 10-49 employees and 50 companies with 50-100 staff.
The KPMG Entrepreneurs Barometer also found that the average expected turnover increase is 16%, with the increase being higher among smaller companies and those located in Dublin.
Around 40% of respondents also said they expect to hire more staff in the next 12 months, although half the respondents said they have difficulties recruiting the right people for their business.
While Brexit isn’t dampening optimism, two-thirds of entrepreneurs sampled are concerned that it will impact negatively on their business. Nearly one in five anticipate no Brexit impact on their business at all.
KPMG found that more than half of respondents expect to be negatively impacted by the potential introduction of border checks and currency fluctuations, particularly so among larger and exporting companies that took part in the survey.
Further findings in the KPMG survey show that:
• 66% of respondents plan to expand in the near future. This will mainly be funded by working capital/internal funds (52%) and bank finance (40%).
• Smaller companies are more likely to use private equity and leasing/hire purchase to fund their expansion. Only one in three of the businesses surveyed believe it is easy to access funding at the moment.
• 58% of entrepreneurs believe that the lack of availability of residential accommodation in Ireland is a disadvantage in their ability to recruit and retain staff, with 40% reporting that their staff are finding it difficult to find suitable residential accommodation.
• The vast majority support the move towards more action on climate change but 53% have concerns about the increases in business costs these actions will bring.
When asked for their views in relation to the current tax regime, three quarters of the respondents said they believe the regime is more favourable to multinationals than indigenous enterprise. Additionally, half the respondents thought that the Irish tax system places a significant administrative burden on smaller businesses.
Among entrepreneurs, alignment of personal tax rates for self-employed, capital gains tax reform and share scheme incentives tailored for SMEs are the top three elements they would like to see addressed in Budget 2020.
KPMG partner Olivia Lynch (pictured) said that it was a little surprising to see the high optimism levels despite the high chance of a hard Brexit.
“We feel this is indicative of the fact that Irish entrepreneurs are extremely resilient and innovative,” Lynch added. “It is clear, however, that they have some real concerns regarding some key tax policy issues which they would like to see addressed in Budget 2020.”