Lessons from the month of January

As brightness finally returns and we enjoyed our newest bank holiday, please join us in reflecting on the month that was – warts and all.

1. Budget changes came into effect in January.

You might have noticed that your paycheque was a little bigger this month. That’s a result of last October’s budget, which saw “something for everybody”. At the time, it was estimated that taxpayers would save about €800 a year from income tax changes, while other measures, such as the increase in the rent credit and increased welfare payments, would also ease the pressure on households around the State.

Other changes include new capital gains tax relief for angel investment in innovative start-ups. Qualifying investors can benefit from a reduced rate of CGT for gains arising from the disposal of a qualifying investment in a qualifying company, up to a maximum gain of twice their initial investment. This will be available to anyone who invests for at least three years.

The Employment Investment Incentive Scheme (EIIS) was also enhanced to double the maximum investment on which you can claim relief to €500,000 per annum where shares are held for a minimum of four years. EII reform has been one of the key requests from the Irish start-up sector and these changes, which started on January 1, have been seriously welcomed.

Finally, changes to CGT retirement relief will also include extending the upper age limit to 70 from 66. A limit of €10m was also introduced on qualifying disposals to a child up to the age of 70. These changes will come into effect from 1 January 2025.

You can read more on these changes in our blog HERE.

2. Femtech is a-go.

At Health Innovation Hub Ireland’s (HIHI) first innovation call focused on femtech  earlier this month, eleven winners, which include innovations covering fertility, bladder health, menopause and Parkinson’s, were handpicked to receive support from HIHI to develop their products. This is big news for women’s health and menopausal health, two sectors repeatedly overlooked in recent years.

Among the winners were BladderBoss programme creator Amara Therapeutics; Onwave, with its EndoSolve digital platform for the early diagnosis of endometriosis; and identifyHer, which is developing a wearable biosensor to detect and track menopause symptoms.

Meanwhile, NovaUCD, the hub of innovation-related activities at the University, has launched an AI Ecosystem Accelerator for start-ups at UCD in partnership with CeADAR, the national centre of applied artificial intelligence. The six-month programme, commencing in 2024, will support entrepreneurs who are developing disruptive AI solutions for the global market in sectors such as healthcare, cybersecurity, education, sustainability, finance, content creation, supply chain and customer service.

Applications are now open for the programme via – ucd.ie/innovation/aiecosystem.

3. Inflation by way of the Red Sea.

Despite inflation in the US and other major economies slowing over the past year after record highs, fears that it could spike again are growing as disruption to one of the world’s main trade routes persists. Attacks by Iran-backed Houthi militants in the Red Sea mean many container ships, oil tankers and bulk carriers, which transport raw materials, have been forced to take a longer route around Africa, sending shipping and insurance costs through the roof.

Oil prices briefly jumped above $80 (€73) a barrel for the first time in 2024 following more than 25 attacks by Houthi militants on the globally critical Red Sea shipping route since November.

Also, energy traders have warned that higher prices could become the norm as the conflict stemming from the Israel-Hamas war threatens to escalate in the wider region and cause further disruption to supply chains.

4. AirDrop is no longer private, it seems.

A Chinese tech company has allegedly succeeded in cracking the encryption around Apple’s AirDrop wireless file-sharing function, meaning that they can now identify users, according to judicial authorities in Beijing. During the month, company Wangshendongjian Technology was able to aid police in their tracking down of people who used the service to send “inappropriate information” to passersby in the Beijing subway, as per the city’s Justice Bureau.

Those responsible were linked by their mobile phone numbers and email addresses, the department said. “We also know that several suspects had been identified, without giving details about the nature of the messages.”

AirDrop has been used in recent months by Chinese protesters to spread anonymous messages critical of the Chinese government. Wangshendongjian Technology “broke through the technical difficulties of anonymous traceability through AirDrop,” which “prevented the further spread of inappropriate remarks and potential bad influence,” the department said.

5. Startup increases, but potentially not for long.

The number of new companies registered in Ireland last year jumped by 944, largely as a result of activity outside of the major urban hubs, figures from CRIFVision-net show. 22,581 new company start-ups were registered in 2023, an increase of 4% from 2022, which was the worst year for new company registrations since 2016 at 21,018.

The level of start-up growth recorded in 2023 was the second–highest increase in new companies in the past six years since 2017, with only 2021 seeing a higher level of start-up growth due to the unprecedented circumstances created by the pandemic. However, the research also indicated that a third (33%) of new companies will go under within their first four years, with heightened vulnerability observed in the third and fourth years. “This trend may be influenced by the prevailing housing crisis coupled with low unemployment rates and resource constraints,” said Christine Cullen, managing director of CRIFVision-net. “This underscores the need for increased local and government support, acknowledging challenges business owners face such as high energy, rental costs and the continued uncertainty caused by inflation.”

6. And finally, fields worth fighting for.

The value of land transactions fell to €515m in 2023, with 62% of activity taking place in the final quarter of the year, according to Savills Ireland. The largest deal was the sale of the former Jury’s Hotel in Ballsbridge to the US State Department for €152m, representing the price paid for the cleared site, where a new embassy will be constructed once planning permission has been obtained.

For the time being, Savills anticipates that residential sites will remain the preference for buyers, although demand for prime logistics land will also prevail, and sites with planning permission in place are going to attract a premium due to delays in the planning system. As a result, many funders view sites without planning as carrying too much planning risk currently as the Planning and Development Bill slowly progresses through the Oireachtas. The bill includes plans to restructure An Bord Pleanála amid concerns of cannibalisation within the planning system as ABD draws its planners from county councils.

In summary: With the Oscars beckoning, just two short years after Will Smith decided to storm onstage and give Chris Rock an almighty dig, let us be reminded that the time of reinvention is now: “I call it the ‘holy slap’ now,” Jada Pinkett Smith recently said of the incident. “Because so many positive things came after it.”

God, celebrities really make delusion seem delectable, don’t they? That said, however, as Nora Ephron put it: everything is copy. If only the world of journalism agreed.

For now, we think it best to keep schtum and hope for better – even if that is just the extra few euros on your paycheque. (While it may be nothing on Toy Show The Musical’s sponsorship, it’s not to be sniffed at.) So although our weather, news cycle and economy all feel rather immovable – the month of resolutions has come and gone – maybe bask in the knowledge that if the Fresh Prince can live after The Slap, then you too can vibe your way to Valentine’s Day.

See you next month!

Our team is dedicated to providing you and your business with the absolute best business advice out there. We approach each and every case from a fresh perspective, working with you to find tailored solutions that leave your business feeling stronger than ever. With our expert analysis, we translate figures into a language you can understand. Using timely, reliable advice, our experienced team of experts devise sophisticated plans to encourage cost efficiency and growth. To find out more, contact our team at Fitzgerald Power today.