The Seed Capital Scheme should be extended

The Seed Capital Scheme is a very valuable tax relief for some new enterprises. It should be extended to more start-ups.

The Scheme allows an individual, who invests in a new enterprise, to receive tax relief for the share capital they invest in the business.  The tax relief is in the form of a refund of income tax paid in previous years.

The Enterprise Ireland website contains  a useful summary of the Seed Capital Scheme,  while Revenue.ie has a more detailed (and equally useful) guide to the Scheme.

Unfortunately, the Seed Capital Scheme is restricted to a narrow range of business activities. In general, these  are

  • manufacturing,
  • tourism undertakings,
  • internationally traded services,
  • horticulture/mushrooms/plant cultivation,
  • commercial research and development,
  • musical/video industry; and
  • recycling activities.

The full list of eligible categories,  and detailed conditions,  are listed on the above Revenue link.

In my experience, the Scheme’s restrictions mean that most service-sector start-ups don’t qualify for it.  This needs to change.

The extension of the Scheme to all genuine start-ups would provide a fresh incentive for new enterpreneurs and a strong stimulant for job creation.