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Why Are Entrepreneurs Important?

Simply put, without entrepreneurs we wouldn’t have businesses. Their creativity and forward thinking are essential to our everyday lives, and contribute far more than just money. So why else are entrepreneurs so important?

1. Entrepreneurs can inspire others

Entrepreneurship is infectious. When businesses and individuals are looking to solve a problem, the tenacity with which entrepreneurs set about tacking it can be very inspirational to others. Life-changing innovations particularly can really set peoples’ imagination alight.

Perhaps most importantly, successful entrepreneurs often become involved in helping society altruistically, through charity work or by offering funding. This can be seen with big names such as Alan Sugar and James Dyson, to name just two.

2. Entrepreneurs create wealth

Entrepreneurial ventures, particularly those which are successful, generate money. Businesses that have already been around for a while run the risk of stagnating and hitting an ‘income ceiling’, but new and improved products, technologies and services can move things along again. They can also enable companies to expand into new markets and to create more new wealth, bringing further employment. This then cascades down to provide better earnings potential, higher national income in the form of increased tax take and hopefully more government spending. This revenue can in turn be reinvested by the government into further development projects and investment into the workforce.

3. Entrepreneurs promote social change

The launching of new products and services reduces country’s requirement to use more dated ideas or technologies, bringing about a better quality of life generally. By making a product less scarce and more suited to peoples’ needs, it can have a positive impact not only on individuals but on businesses too. Products which make life easier in some way will also bring huge benefits to society over time.

4. Entrepreneurs can boost employment

A huge contributor to a country’s economic success lies in its ability to create plenty of job opportunities for the people that live there. Small businesses and start-ups are essential in training locals with new skills which they can then build on to become professional. Such early stage businesses are also crucial in generating and growing job opportunities in the field.

5. Entrepreneurs promote research and development

While it’s incredibly important to come up with new business ideas, the cultivation of such ideas through research and development is also vital. After all, a good idea is not much use if it is not carried out! Indeed, a business that’s built around entrepreneurship will put innovation at the heart of its operations, making it more likely to survive and thrive long term.

Entrepreneurship also highlights the importance of research and development (R&D) in discovering how viable an invention is, and how commercially successful it may be long term.

6. Government financial assistance towards the costs of innovation

The government has long been keen to encourage innovation in business by way of building a stronger economy. The R&D Tax Credits scheme was therefore launched back in 2002, offer a lucrative tax incentive to reward innovation. It works by offering a reduction in a company’s Corporation Tax liability in respect of their R&D project costs. Alternatively, non-profitmaking companies can receive a lump sum amount. The relief can be spent on anything, including hiring more staff and growing the company.

Companies can claim up to 33p for every £1 of eligible costs spent on qualifying projects. However, the exact amount a company can claim depends largely on their size and whether they have previously received any state aid. Broadly speaking, companies with under 500 members of staff, a turnover of less than €100 million or gross assets of under €86 million will apply using the SME scheme. For larger companies over these limits, it’ll be the RDEC scheme.

You can find out more about which scheme you should claim under by reading our recent blog: What's The Difference Between The SME Scheme and RDEC?

It’s not just science companies and laboratories that are eligible for R&D tax relief either

Companies that undergo any or all of the following may apply:

• Those that have developed new products, services or processes
• Those that have significantly improved or upgraded a product, service or process that already exists

What costs can be included in an R&D Tax Credit claim?

Main qualifying costs include:

• Consumables: These are materials used up solely during the course of the R&D work, for example power, water and fuel. For an R&D Tax Credit claim, a proportional amount needs to be allocated to reflect R&D work only.
   
• Staffing costs: These include things like staff wages, salaries, overtime payments, reimbursed expenses and employer pension and NI contributions.
   
• Software: This is software developed for use in a specific R&D project. If it was partially used for other non-related work, then only the proportion used for the R&D project can again be claimed.
   
• Clinical trials: Particularly in relation to the pharmaceutical industry, any costs incurred in clinical trials like payments to volunteers can be included in an R&D claim.

Start your claim today with the Tax Cloud portal

Although there are many projects and costs that would attract R&D Tax Credits, putting together a claim is tricky. It involves in-depth knowledge around accurately calculating the different elements, and a separate narrative needs to be included too. This not only describes every facet of the project, but why you think it’s eligible for the relief.

Getting an application wrong can lead to the Revenue taking further action, including the investigation of your wider tax affairs. It’s something you’ll certainly want to avoid.

With this in mind, the Myriad Associates team is here to help. We created our highly accurate Tax Cloud portal for businesses, you can use it to guide you through the claims process, whilst our team of R&D specialists and accountants are on hand to help.

Why not get started today or call our friendly Dublin-based team on +353 1 566 2001. Additionally, feel free to use our contact page.