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Just a third of SMEs have applied for Govt’s costs grant

Just a third of businesses across the country that are expected to apply for the Government scheme designed to help firms with rising costs have done so.

With a week to go before the closing date for applications, the Department of Enterprise said 40,581 submissions for the Increased Cost of Business (ICOB) scheme have been received out of an original estimate of 120,531 businesses that should be eligible.

Across the various local authorities, which are administering the schemes, the levels of applications vary considerably.

The highest proportion of applications from any local authority area has been in Cork County, where 45.5% of the businesses which are expected to apply have done so, followed by 44.8% in Roscommon.

Almost 44% of firms in Mayo, Longford and Monaghan have also applied.

The lowest levels of applications so far have been in Cavan at 20.8%, followed by Donegal at 25.31%, Galway County Council at 26.6% and Leitrim at 26.9%.

The €257m scheme was announced in the Budget last October and aims to help small and medium sized businesses to cope with the increasing cost of doing business.

The Government has faced repeated criticism in recent months over the cumulative cost for small and medium-sized businesses of policy changes designed to improve the conditions of workers.

These include the shift to a living wage, changes to sick pay entitlements, the introduction of an auto-enrolment pension scheme and other enhancements.

The assistance comes in the form of a one-off grant payment based on the value of the commercial rates bill that eligible businesses paid last year.

For qualifying businesses with a rates bill of less than €10,000, the ICOB grant will be paid at a rate of 50% of the business’s Commercial Rate bill for 2023.

For qualifying businesses with a rates bill of between €10,000 and €30,000, the ICOB grant will be €5,000.

Businesses with a rates bill greater than €30,000 cannot receive an ICOB grant.

Business organisations welcomed the announcement of the assistance, but have said it will only go so far and that further, more targeted help is needed.

Those working in the tourism and hospitality sector have repeatedly called for the reintroduction of the reduced 9% VAT rate, which they claim would help to defray some of the costs they are facing and boost business.

The Government has signaled that it will bring forward a further package of measures soon to help firms with costs, although a change to the VAT rate is not expected.

Instead, reports have suggested that a PRSI rebate scheme may be used instead, as well as changes to the entry point for employers’ PRSI.

However, groups representing small business have warned that this would not be enough for the small businesses that are facing significant financial challenges.

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