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21st of July 2018

Economy



Tax Relief Programme For New Businesses

[Updated] Minister of Economic Development & Tourism Jamahl Simmons is holding a press conference this afternoon [July 2] on a new tax relief programme to assist entrepreneurs. We will have additional coverage later on and in the meantime the live video of Minister Simmons press conference is below.

Speaking today, Minister Simmons said, “Any new business owners who register with the BEDC and meet the criteria in the creation of a new business, will be exempt from the employer portion of payroll tax for not just themselves, but also any employees they hire for the first year of business.

“This will drive down costs for first time entrepreneurs and is intended to stimulate the creation of new jobs and opportunities for Bermudians.

“This initiative will apply to all new small businesses that are Bermudian owned and managed and operating locally; those which have an annual gross payroll not exceeding $500,000 and having annual sales revenues of less than $1,000,000 and who establish a new local business in Bermuda after April 1st, 2018.”

Update: The live broadcast has concluded and the 7-minute replay is below

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Update: 10.27pm: Minister Simmons said, “Our government is committed to building a fairer, better Bermuda and in creating an environment where obstacles towards Bermudians “doing for self,” are systematically removed.

“In 2017 we pledged to offer tax relief for first time business owners. Today, we announce the fulfillment of that pledge and another step forward towards making our country a better place for Bermudian entrepreneurs.

“Any new business owners who register with the BEDC and meet the criteria in the creation of a new business, will be exempt from the employer portion of payroll tax for not just themselves, but also any employees they hire for the first year of business.

“This will drive down costs for first time entrepreneurs and is intended to stimulate the creation of new jobs and opportunities for Bermudians.

“This initiative will apply to all new small businesses that are Bermudian owned and managed and operating locally; those which have an annual gross payroll not exceeding $500,000 and having annual sales revenues of less than $1,000,000 and who establish a new local business in Bermuda after April 1st, 2018.

“Once a small business is established, they will need to register with the BEDC who, once an assessment and site visit of the business’ new location is completed, the BEDC will issue a New Entrepreneurs Payroll Tax Relief Letter within 5 business days.

“This letter will ease business owners from the heavy burden that comes with paying the employer portion of Government’s payroll tax on the remuneration paid to themselves [if owner-managed or self-employed] and any employees for up to 4 tax periods, from the start date of the business.

“After entrepreneurs have received their approval letter, the BEDC will email a copy of the letter to the Office of the Tax Commissioner [OTC] to let them know the business has been approved and is now ready to receive payroll tax relief.

“According to a recent Stakeholder Survey by Global Research, commissioned by BEDC, 44 percent of entrepreneurs felt that Government requirements represented a significant challenge when starting a business in Bermuda. It is our position that government must enable and not impede legitimate business creation.

“That same survey showed that interest in starting a new business had increased significantly over the last six years, with 84 percent of non-business owners expressing a desire to start a new business within the next two years… A nineteen percent increase from 2012. We believe that entrepreneurial spirit should be supported, cultivated and empowered.

“Bermuda is ripe for entrepreneurism, with more and more people noticing gaps in the Bermuda market, wanting to do for self and seeking to earn an additional income. As a result, we believe more has to be done to support Bermudian entrepreneurs and give them the best possible chance for success. This payroll tax relief is just one way we are working to do this.

“But we aren’t content to stop there!

“Government is working closely with the BEDC to reduce the obstacles, red tape and bureaucracy that can prevent or slow down Bermudians seeking to start business. We are also looking at ways to tackle some of the high costs and lack of funding available to local entrepreneurs. It is all part of our commitment to supporting entrepreneurship and providing small business owners with access to greater opportunities.”

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