SURE and Section 486C: The Two Start-Up Reliefs Irish Founders Miss
Two distinct Irish start-up reliefs — Section 486C reduces your company's corporation tax for five years; SURE refunds income tax you already paid. How each works.
- Author
- Abbey Blue Formations
- Published
- Reading time
- 7 min read
Two significant tax reliefs exist for people starting a company in Ireland, and they are regularly confused with one another because both get described loosely as "start-up relief".
They are entirely different. One reduces the company's corporation tax bill going forward. The other refunds income tax you personally already paid in previous years. A founder leaving PAYE employment to start a company may qualify for both.
Here is what each actually does.
Section 486C: Tax Relief for New Start-Up Companies Ireland Offers
Section 486C of the Taxes Consolidation Act 1997 reduces the corporation tax payable by a new trading company in its early years.
How much relief
- Where the company's total corporation tax liability for a tax year is €40,000 or less, full relief is available — the liability on the qualifying trade is reduced to nil.
- Where the liability is between €40,000 and €60,000, marginal relief applies on a sliding scale.
- Above €60,000, no relief.
Note that the €40,000 test looks at corporation tax due on all the company's income and gains, not just the qualifying trade — though the relief itself only applies to profits from the new trade and to gains on disposal of assets used in that trade. Investment or rental income cannot be sheltered by it.
For how long
Five years, where the qualifying trade commenced on or after 1 January 2018. For trades commenced before that date, three years.
The PRSI link
This is the part that surprises people. The relief is deliberately tied to employment: it is capped by reference to the employer's PRSI paid by the company, subject to a maximum of €5,000 per employee or director.
The policy logic is that the relief is meant to support companies creating jobs. The practical consequence is that a company with profits but almost no payroll may get far less relief than the headline €40,000 suggests.
Finance Act 2024 improved this for owner-managed companies: Class S PRSI paid by company directors on emoluments from the company can now be taken into account, subject to an annual limit of €1,000 of Class S PRSI per individual, for accounting periods beginning on or after 1 January 2025.
If you have no profits yet
Unused relief arising in the first five years because of insufficient profits can be carried forward for use in later years — an important feature for companies that lose money before they make it.
Eligibility basics
The company must be a new trading company, incorporated on or after 14 October 2008, commencing a qualifying trade within the window set out in the legislation. That window has been extended repeatedly by successive Finance Acts, so confirm the current end date with Revenue or your accountant rather than relying on any figure quoted in an article.
The relief is claimed through your CT1 return on ROS.
SURE: A Refund of Income Tax You Already Paid
Start-Up Relief for Entrepreneurs is a completely different mechanism. It gives an individual a refund of income tax already paid, where that person invests in shares in their own new company.
The broad shape
SURE is aimed at people leaving PAYE employment — or recently unemployed — to start a business. Where you qualify, you can claim a refund of income tax paid in the year of investment and in previous years, going back up to six years.
For someone who has spent years in a well-paid PAYE role, that pool of previously paid tax can be substantial, and it can effectively fund a meaningful portion of the initial share investment.
The general conditions
The qualifying conditions are detailed, but the shape of them is:
- You are starting a new company and becoming a full-time employee or director of it.
- Your income in recent years has been mainly PAYE income.
- You invest in new ordinary shares in the company and hold them for a minimum period.
- There are limits on other non-PAYE earnings in the years before the claim.
Revenue publishes the full conditions and provides an online SURE calculator that indicates the potential refund based on your own figures. Use that rather than an estimate from anywhere else — the conditions are specific and the arithmetic depends entirely on your personal tax history.
Timing matters enormously
SURE is claimed in connection with an investment in a new company, which means the sequence in which you resign, incorporate, invest and begin trading can affect whether you qualify. This is a decision to take advice on before you act, not after.
Which Applies to You?
| Section 486C | SURE | |
|---|---|---|
| Who benefits | The company | The individual founder |
| Tax relieved | Corporation tax | Income tax already paid |
| Direction | Reduces future liability | Refunds past payments |
| Duration | Up to five years | Claimed on investment |
| Key constraint | Employer's PRSI cap | Prior PAYE income and shareholding conditions |
They are not alternatives. A founder leaving employment to incorporate may qualify for SURE personally while the company separately claims Section 486C relief.
Before You Rely on Either
Both reliefs have detailed conditions, and both are areas where a formation agent's role ends and an accountant's begins. What we can do is make sure the corporate side is set up correctly — incorporation, share structure and tax registrations — in a way that does not accidentally close off a relief before you have had the conversation.
Get the tax advice early. Decisions made in the first month of a company's life are much harder to reverse in the second year.
Frequently Asked Questions
What is the difference between SURE and Section 486C start-up relief?
They relieve different taxes for different people. Section 486C reduces the corporation tax payable by your new company on profits from its qualifying trade for up to five years. SURE refunds income tax that you, the individual, already paid in earlier years, where you invest in shares in your own new company after leaving PAYE employment. One helps the company keep more of its future profits; the other puts money back in your pocket from tax you paid in the past. A founder can potentially benefit from both.
How much corporation tax relief can a new Irish company actually get?
Full relief is available where the company's total corporation tax liability for the year is €40,000 or less, with marginal relief between €40,000 and €60,000. But the headline figure is capped by employer's PRSI — relief is limited to a maximum of €5,000 of employer's PRSI per employee or director. A company with profits but little payroll will get considerably less than the headline. For accounting periods beginning on or after 1 January 2025, Class S PRSI paid by directors on their emoluments also counts, subject to €1,000 per individual per year.
Can I claim Section 486C relief if my company is not yet making a profit?
The relief has no value in a year with no profits to relieve, but it is not lost. Unused relief arising in the first five years of trading because of insufficient profits can be carried forward for use in later years. This is a genuinely useful feature for companies that spend two or three years investing before they turn profitable, and it is worth ensuring your accountant is tracking the accumulated amount.
How far back can I claim an income tax refund under SURE?
SURE allows a refund of income tax paid in the year you make the investment and in previous years, going back up to six years. The amount depends entirely on how much income tax you actually paid in those years, so the potential refund is much larger for someone leaving a long, well-paid PAYE career than for someone with a short employment history. Revenue provides an online SURE calculator that works this out from your own figures.
Do I qualify for SURE if I am leaving my job to start a company?
Leaving PAYE employment is the typical qualifying scenario, but it is not sufficient on its own. The conditions cover the composition of your income in recent years, becoming a full-time employee or director of the new company, investing in new ordinary shares, holding them for a minimum period, and limits on other earnings. Because the conditions turn on the sequence of events, take advice before you resign and incorporate rather than afterwards — the order in which you do things can affect eligibility.
Is there a deadline for starting a business to qualify for Section 486C relief?
The relief applies to qualifying trades commenced within a window specified in the legislation, and that window has been extended several times by successive Finance Acts. Any specific end date quoted in an article risks being out of date by the time you read it, so confirm the current position with Revenue's own guidance or your accountant before making a decision that depends on it.
Can I claim both SURE and start-up corporation tax relief?
They operate independently — one relieves your personal income tax, the other the company's corporation tax — so qualifying for one does not exclude the other. Whether you actually qualify for each depends on your own circumstances and the company's, and both have detailed conditions. This is exactly the situation where an hour with an accountant before incorporation pays for itself.
How do I claim start-up relief on CT1, and how is SURE claimed?
Section 486C relief is claimed by the company through its CT1 corporation tax return, filed on ROS. SURE is claimed by the individual in connection with their share investment, following Revenue's process. Neither is applied automatically — if nobody claims them, nobody gets them, which is the main reason founders miss out on reliefs they were entitled to.