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Today’s announcement was an opportunity to go further to provide help to businesses struggling in current inflationary environment
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Disappointing not to see greater certainty given to businesses in Northern Ireland as to what the future corporation tax regime will look like
Measures to ease the rising cost of living, particularly for lower earners, are very welcome today, however more could have been done to support businesses in Northern Ireland also experiencing inflationary pressures. That’s according to Chartered Accountants Ireland in response to the Spring Statement announced by Chancellor Rishi Sunak.
Commenting Cróna Clohisey, Tax and Public Policy Leader, Chartered Accountant Ireland said: “There was little in today’s Spring Statement of immediate benefit for businesses in Northern Ireland that continue to struggle with rising energy costs, inflation, staff shortages and turbulent supply chains as they emerge from the pandemic.
“While the Chancellor did increase the employment allowance from £4,000 to £5,000 and acknowledged that there would be further tax measures announced as part of the Autumn Budget, businesses in Northern Ireland would have greatly benefited from the certainty of a confirmation of a reversal or even a postponement in the decision to increase corporation tax in Northern Ireland from 19% to 25% from April 2023. This missed opportunity further strengthens the case for the region to activate powers to set its own corporation tax rate.”
The Institute has long campaigned for Northern Ireland to have the power to set its own corporation tax rate and believes that the rate should be more in line with the OECD’s proposed global 15% minimum rate. The majority of Chartered Accountants surveyed in Northern Ireland favour the introduction of a devolved corporation tax rate for the region, with almost 9 in 10 of those in favour of the belief that the rate should be less that the current 19%.
Cróna Clohisey continued: “Northern Ireland could greatly benefit from reducing its corporation tax rate below the current 19%. The interim report of the Fiscal Commission in NI has already stated that there is a case for devolving corporation tax powers to the NI Assembly and urged the NI Executive to develop its own plans to demonstrate the sustainability of its finances.
“Northern Ireland has lower levels of income and investment compared to the rest of the UK and we believe that allowing the Northern Ireland Assembly to set a lower rate would enable the region to attract increased high-value FDI, drive investment and expansion by local companies. The Institute believes that with the correct infrastructure and tax policy, there is significant potential for the region.”
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