By Shannon Power, 22nd September 2026
The Small Firms Association (SFA) has published its pre-budget submission for 2027, outlining a series of measures aimed at addressing the rising costs, labour pressures, energy challenges, and regulatory burdens facing Ireland’s small business community.
The submission outlines a range of proposals aimed at improving competitiveness, supporting employment, encouraging investment, and reducing administrative burdens for SMEs. The SFA also argues that rising employment costs are placing significant pressure on small firms and that any further increase in the National Minimum Wage would be unsustainable for many businesses.
It should be noted that these are recommendations from the SFA and have not been adopted by Government. The final Budget 2027 measures will be announced by the Minister for Finance later this year.
At a glance...
1. Tax Reliefs to Support Growth and Investment
The SFA is seeking significant tax reforms to encourage entrepreneurship and investment. It proposes a range of measures designed to improve access to investment capital, support business growth, and reduce administrative costs, including:
- Reduce Capital Gains Tax (CGT) from 33% to 20%, with lower rates for long-term business owners.
- Introduce a simplified 10% CGT rate for angel investors across trading and professional services businesses.
- Reduce commercial property stamp duty from 7.5% to 4%.
- Simplify R&D tax credit claims and corporate tax compliance for small firms.
2. Lower Employment Costs
With labour costs identified as one of the biggest challenges currently facing SMEs, the SFA is seeking measures that would reduce payroll expenses and help businesses retain and recruit staff. The SFA recommends:
- A temporary employer PRSI rebate for lower-paid workers.
- A reduction in employer PRSI rates for small businesses.
- Deferral of planned PRSI increases.
- No further increase in the National Minimum Wage in Budget 2027.
3. Reduce Red Tape
As compliance obligations continue to grow, small businesses are spending more time managing regulatory requirements and less time focusing on growth and day-to-day operations. To help ease this burden, some suggested changes include:
- Reform of Enhanced Reporting Requirements (ERR) for smaller businesses.
- A move from real-time reporting of employee benefits to monthly reporting.
- Lower penalties for reporting errors and simplify administration.
4. Help SMEs Attract and Retain Talent
SMEs often compete with larger employers that can offer more extensive benefits packages. To help level the playing field and provide greater flexibility in rewarding employees, the SFA proposes:
- Increasing the Small Benefit Exemption to €2,000 annually per employee.
- Removing limits on the number of tax-free benefits that can be provided.
- Modernising SME share schemes.
- Increasing the Approved Profit Share Scheme (APSS) tax-free limit from €12,700 to €50,000.
5. AI, Skills and Digital Transformation
As AI and digital technologies become increasingly important to business productivity and competitiveness, the SFA is calling for greater investment in training and digital readiness. The proposals reflect growing concern that smaller firms may struggle to compete if they are unable to access the training and resources needed to implement AI effectively. Key proposals include:
- A new €10,000 AI training grant for SMEs and mid-caps.
- A €190 million investment in AI and digital readiness.
- Increased funding for MentorsWork and other digital upskilling programmes.
- €50 million in additional funding for Skillnet Ireland over three years.
6. Energy Cost Supports
Energy prices continue to place pressure on business margins, particularly for smaller firms. To address these high operating costs, they suggest:
- Reducing policy-related electricity charges through Government support.
- Introducing emergency energy supports during future price spikes.
- Extending diesel rebate schemes to company fleets and machinery.
Bottom Line
The Small Firms Association Pre-Budget Submission 2027 focuses on reducing the cost of doing business, attracting investment, supporting employment, and helping SMEs embrace digital transformation. While these proposals have not yet been adopted by Government, they highlight the key issues many small businesses continue to face and indicate the measures the SFA believes would strengthen competitiveness and growth.
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Disclaimer: This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.
