Concerns have been expressed over the slow take up of the Government’s flagship employee share ownership scheme for start-ups and SMEs, the Key Employee Engagement Programme.
Delegates at the IPSA seminar on KEEP in Dublin on Wednesday morning heard that very few companies which seek to implement employee share ownership options have adopted the scheme or are in the process of doing so.
The level of early stage market valuations for companies, the impact of qualifying restrictions on company structures, and the parameters of the Fintech exclusion were all identified as issues which act as barriers to the start-ups and SMEs which KEEP is designed to assist.
The seminar was very well attended, with 54 delegates in KPMG’s Dublin offices for the event, which was held the day after Revenue published the new Share Schemes Manual covering KEEP. The speakers were EY Tax Director Stephanie Bowe, KPMG Tax Director Gemma Jacobsen and IPSA CEO Gill Brennan.
Delegates were told that it will take time for KEEP to evolve and better fulfil its purpose. IPSA is engaged in ongoing dialogue with the Department of Finance to highlight issues raised by our members over KEEP and to help identify measures of reform which can improve it.
Speaking after the seminar, Ms Jacobsen, who is a member of the IPSA Council, said that IPSA needed to hear both “good and bad stories” from its members detailing why companies were or were not adopting KEEP. She said that by providing evidence and testimony of where KEEP is succeeding and failing, IPSA will be better placed to convince the Government of any required changes to the scheme.
During the seminar, Ms Brennan stressed the importance of getting KEEP right. She said: “If we can get the KEEP legislation right – and by right, I mean fit for purpose for all forms and types of start-ups and SMEs currently operating in Ireland – we stand to gain significantly. We stand to gain more profitable firms which in turn generate more corporation tax for the exchequer. How can this be a negative thing?”
“More profitable start-ups and SMEs means a broadening of the net for corporation tax – hence lessening our reliance on 10 multinationals to deliver over 40% of our corporation tax-take.
“Profitable firms mean sustainable employment. Sustainable employment means a lessening of pressure on social welfare costs. And subsequently less pressure on the Government’s purse.
“Sustainable employment in profitable firms means happier wealthier employees, which filters down into society. Communities where employee owned businesses are at the core of the socio-economic circle report higher education levels, lower crime rates, greater community engagement, and narrower gaps between rich and poor.”
The seminar slides are available from the IPSA website at www.ipsa.ie. Should any of our readers be interested in contacting any of the seminar speakers or learning more about the work IPSA can do on your behalf and with you, please contact firstname.lastname@example.org.