The aim of the SME Test is to assist policymakers to think about the potential impact of any new legislation or regulation in terms of the regulatory burden it places on SMEs. It is designed to invite consideration of less stringent compliance requirements for smaller companies including simplification of regulatory adherence through the use of templates, reduced thresholds for SMEs and use of plain English in forms, and the use of exemptions where possible.
Research on regulatory burdens and compliance costs indicates that where a large company may spend one euro per employee to comply with a regulatory duty, a medium-sized enterprise might have to spend around four euros and a small business up to ten euros. As 92% of Irish companies are micro-enterprises employing less than 10, and a further 6.8% of businesses employ between 10 and 49, one-size-fits-all regulatory compliance requirements can place these firms at a disadvantage to large multinational companies. It is therefore important to remove any unnecessary regulatory obstacles for these businesses to start, establish and grow by encouraging the growth and competitiveness of Irish SMEs.
The European Commission’s Small Business Act requires each Member State to create and implement its own SME Test, and the current Programme for Government commits to the support of its use across Government as a means of reducing bureaucracy for SMEs.
Point of contact
Laura Byrne, Higher Executive Officer, Department of Enterprise, Trade and Employment