Institute meets with Northern Ireland business bodies on proposal to reduce corporation tax rate in Northern Ireland

Last Monday, Chartered Accountants Ireland and the Ulster Society were pleased to meet with representatives from the Northern Ireland Chamber of Commerce and the Confederation of British Industry Northern Ireland to discuss potential ways forward in the ongoing campaign to reduce the corporation tax rate in Northern Ireland.

The meeting was very informative and productive and each of the organisations agreed that Northern Ireland needs a coherent, long term industrial policy that attracts investment, creates secure, well paid jobs and fosters innovation. There was also agreement on the end goal of reducing the corporation tax rate in Northern Ireland.

The key issues and Institute stance

One of the main issues discussed was the need for an economic assessment of the impact of reducing the corporate tax rate on employment, earnings and investment. The 2021 ESRI research 'Enhancing Attractiveness of the Island of Ireland to High-Value Foreign Direct Investment' shows that a reduction in the rate of corporate tax to 15% would yield an annual increase of 7.5% in high-value Foreign Direct Investment in Northern Ireland.

One of the main issues that remains is the potential impact on the block grant that Northern Ireland receives every year. The Institute outlined various measures that can be availed of to overcome this issue, most notably the use of a low interest loan from Westminster to manage the initial drop in corporate tax revenue that would arise immediately after the rate reduction. 

Our progress to date and next steps 

This meeting was an important step in achieving a united approach across the business community in Northern Ireland. Work will continue to garner cross-party consensus on reducing the corporate tax rate in Northern Ireland which will be critical when the campaign is taken to Westminster. This point was highlighted during the Institute's recent appearance before the joint Economy and Finance Committee’s in Stormont earlier this month.

As outlined previously, in November 2025, the Institute wrote specifically to the Exchequer Secretary to the Treasury on this issue. In this letter, we highlighted that the ultimate aim of a lower rate is for it to become self-funding in the longer term, but that it would necessitate a replacement loan at a low interest rate from HM Treasury to fund the necessary block grant reduction.

Last year the Institute published its position paper ‘Enhancing Our Competitiveness: The case for a reduced rate of corporation tax in Northern Ireland’.