Deloitte Highlights Key Measures Needed to Support Family Businesses through COVID-19 has been saved
Deloitte Highlights Key Measures Needed to Support Family Businesses through COVID-19
Recommended measures include raising employer-provided tax-free voucher limit to €5000 for 2020 and 2021
Supports for family businesses are urgently needed to avoid a corrosive family business failure rate later in the year, according to Padraig Cronin, Lead Partner, Family Business & Tax, Deloitte
The July stimulus should provide viable businesses with speedy deployment of funds to cover their significant re-opening costs and outstanding creditors.Theese funds could be provided in the form of grant aid and/or very low interest rate loans, depending on the size of the business, while businesses that continue to be particularly impacted by the social distancing and hygiene requirements (such as hospitality, food service and retail) should be provided with some ongoing support through the continuation of the wage subsidy scheme until at least early 2021.
Businesses also need to be provided with additional tax credits for any expenditure they have had to incur to repurpose their premises or manufacturing plants to comply with the new Health and Safety rules.
Most importantly, says Mr. Cronin, consumer confidence and spending in our local communities is key to an overall recovery. To encourage such spending, he suggests increasing the limit on tax-free vouchers that can be provided by employers from €500 to €5,000 for 2020 and 2021, provided they are used to buy local goods and services.
As the government finalises its July Stimulus plans, Mr Cronin has highlighted these key recommendations following Deloitte’s submission to Government in April that outlined its proposed tax measures to support businesses through the COVID-19 crisis.
Deloitte’s Resilient Family Enterprise Series
The recommendations come as Deloitte launches The Resilient Family Enterprise Series, to support family businesses across the country through COVID-19. Through a series of articles and insights over the coming weeks, Deloitte Private will share the insights of its family enterprise consultants from around the world, taking a deeper dive into the issues unique to family businesses, the challenges and opportunities these present amidst the COVID-19 crisis, and how you can address these in your journey to recover and thrive. The articles and insights can be viewed here.
Commenting on the new series, Ronan Murray, Regional Financial Advisory Partner, said
Despite their reputation for resilience, optimism and agility, most family businesses have been under significant pressure to respond to the general health, safety, and welfare challenges introduced by the pandemic, along with the operational disruptions to their business. This series is aimed at supporting family businesses through this crisis by providing them with insights and actions that they can take now, so that they emerge from this crisis and thrive.
The SME sector is of huge importance to the Irish economy, employing 68 per cent of the country’s 2.3 million employees and this sector, particularly those operating in tourism, retail and food service, all of which rely heavily on cash flow for survival, has taken the brunt of the burden of the economic crisis caused by COVID-19.
The next generation: This crisis could be an opportunity for the next generation in family businesses to prove themselves by actively engaging in the business when resources are scarce, to be a valuable sounding board and source of fresh ideas. As digital natives, their active engagement could be the difference between success and failure right now.
A recent Deloitte global family business survey found that successful family businesses tend to have one quality in common: a sense of purpose beyond being profitable. This sense of purpose has been evident throughout the pandemic crisis with numerous reports of family businesses nimbly adapting their operations and production lines, and redeploying staff to support the relief efforts-from the mass production of personal protective equipment (PPE), to offering accommodations for healthcare and other key workers. It is these inherent values and solid organisational purpose that can secure loyalty far beyond the crisis.
According to Padraig Cronin
Family businesses possess unique characteristics that may position them to thrive as we emerge from the pandemic and play a significant role in the recovery of the economy. However, in order to do that they need support. The proposed programme for government in Ireland recognises the key role that they play in the country’s economy. The supports announced need to be enhanced and introduced quickly in July 2020 to avoid a corrosive family business failure rate later in the year. A failure to provide sufficient supports now will result in a wider adverse societal/community impact.
The following topics will be explored during the series:
- Purpose and trust
- Power and performance: The role of governance
- Beyond business: Philanthropy and strategic investing
- The post-Covid workplace
- Your family business: Planning with a 100-year horizon
- Wellbeing and health: The enterprise, the family and the individual
- What’s next for family businesses?
Issued by Murray on behalf of Deloitte Ireland.
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