Employing more than a million people and accounting for two-thirds of those in the private sector, SMEs form the backbone of the Irish economy and communities across the country.
The sector has demonstrated considerable resilience over recent years, weathering the challenges of the pandemic and considerable global uncertainty, while advancing its goals of embracing digitalisation and sustainability.
With an economy that continues to grow, there is much to be optimistic about. Despite high inflation, there is positivity that surrounding the future of SMEs. The latest Azets SME Pulse Survey revealed fewer than one in five SME leaders anticipate a decrease in revenue and profits this year. However, this sense of optimism should not be mistaken for complacency.
“The outlook for SMEs in the year ahead looks bright, with robust economic growth forecast,” says Neil Hughes, chief executive of Azets Ireland. “However, planning for growth is not entirely straightforward. Small businesses are facing a variety of challenges from rising costs to difficulties attracting and retaining talent and the end of the pandemic debt warehousing scheme.”
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This is reflected in the Azets SME Pulse Survey which shows that inflation is the number one threat facing Irish SMEs at present (56 per cent), followed by increasing interest rates (40 per cent) and the availability of talent (34 per cent).
To address these challenges, Azets Ireland recently joined forces with the Small Firms Association (SFA) for a special #AchievingAmbition event focused on how SMEs can best plan for growth amid new tax and reporting obstacles.
“To successfully manage changes in new reporting requirements, taxation, and rising costs, small business need trusted advisers in place who can offer the practical support and advice necessary to overcome these challenges,” says David Broderick, director of the SFA. “Through the insights and expertise shared by the Azets team, I hope that small businesses will have the tools and confidence to plan for growth in 2024 and beyond.”
From January 1st, 2024, employers and payroll processors will be required to report details of certain payments made to employees and directors. This includes small benefits, remote working daily allowances, travel, and subsistence payments. Alma O’Brien, head of tax at Azets, urged small businesses to review the new requirements and ensure they have the resources to start submitting the relevant details from the new year.
With potential increases in the minimum wage on the horizon, a key theme in the discussion was the importance of managing margins and optimising tax reliefs for SMEs to manage finances and retain talent. O’Brien shared insights on how optimising tax reliefs and employee incentives can play an important role in firms’ talent strategies.
The importance of cash flow planning for 2024 was also highlighted by speakers, with the end of the pandemic debt warehousing scheme requiring firms to set timelines for the repayment of accrued debt. Hughes outlined the range of options that are available to businesses to manage these changes and stressed the importance of early action in decision making.
For businesses struggling with debt, the small company administrative rescue process (Scarp) was referenced as an important tool in facilitating out-of-court debt restructuring for small businesses deemed to be viable. A significant increase in the use of the Scarp process over the past 12 months has seen more small businesses saved and restructured, with over 350 jobs saved in its first full year of operation.
Reflecting on the success of the event with the SFA, Hughes highlights the importance of support for Ireland’s small business community to manage the changes necessary for success over the next 12 months.
“Azets is providing SMEs with the practical advice and support necessary to overcome these challenges and achieve their growth potential. Our team of trusted advisers at Azets Ireland stand ready to support small businesses across Ireland navigate these changes and unlock their future growth potential.”
To learn more about the services and support provided by Azets Ireland for SMEs, visit azets.ie