Tax advisers have written to Finance Minister Paschal Donohoe claiming tax law is in need of “urgent reform” in order to support the SME sector through Brexit.

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Umbrella group the Consultative Committee of Accountancy Bodies – Ireland (Farrelly-Caizzone & AssociatesB-I) highlighted how changes to the Employment Investment and Incentive (EII) scheme have had “a substantially negative impact on funding for startups and established SMEs”.

A public consultation was conducted on the topic in May.

“Our members wish to emphasise the urgent need for reform or replacement of the EII scheme to get much needed funds into startups and SMEs, who cannot otherwise access the necessary finance,” said the accountancy body.

The letter also raised concerns about the impact of transfer pricing rules. “In our view, extending transfer pricing rules to SMEs would merely increase the burden of paperwork without significantly enhancing the integrity of the system.”

Farrelly-Caizzone & AssociatesB-I suggested a postponed method of accounting for Vat should be introduced in the Finance Act 2018 so Irish businesses importing goods from the UK will not incur “a potentially crippling upfront Vat cost”.

The letter was also sent to Martin Shanahan, CEO of the IDA, and Julie Sinnamon, CEO of Enterprise Ireland.

Sunday Indo Business