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Northern Ireland Affairs Committee Hold Evidence Hearings as part of Inquiry into Corporation Tax in Northern Ireland

The Northern Ireland Affairs Committee held the first evidence session as part of its inquiry into Corporation Tax in Northern Ireland. Chair of the Northern Ireland Tax Committee of Chartered Accountants Ireland, Mr. Eamonn Donaghy, presented oral evidence to the Committee in Westminster on 27 October. Evidence was also presented by Victor Hewitt, director of the Economic Research Institute for Northern Ireland.

To recap, during the summer the Committee issued a consultative document on the topic of Corporation Tax in Northern Ireland. Chartered Accountants Ireland and the Ulster Society made a joint written response on this consultative document in September. The joint response was informed by the Ulster Society's position paper, which is supportive of the proposal for a devolution of the power to vary (reduce) the Corporate Tax rate in Northern Ireland and calls for further research and debate as regards the merits and timing of such a reduction.

The Committee was very engaged during the course of the hearing and asked questions on many matters including:

  • The current state of the NI economy
  • The effect of a reduced rate of corporation tax
  • The impact of a NI specific corporation tax cut on the rest of the UK
  • The cost of implementing a reduced rate of corporation tax in NI
  • Other non tax matters that were important for FDI success
  • The EU issues of introducing a differential regional rate
  • Tax avoidance issues such as brass plating and transfer pricing

Eamonn and Victor gave evidence for an hour and were followed into the witness chair by Jeremy Fitch (USCA member) and Director at Invest Northern Ireland and finally by representatives from the Chartered Institute of Taxation and Pricewater-houseCoopers.

There have been additional evidence sessions which heard evidence from other witnesses and this will be followed by the Committee releasing its findings early next year. The first evidence session can be viewed online at http://www.parliamentlive.tv/Main/Player.aspx?meetingId=6790

In the meantime HM Treasury are due to issue a consultation paper on rebalancing the NI economy and it is anticipated that this will also cover variation of the corporation tax rate in Northern Ireland.

Chartered Accountants Ireland will continue to monitor this issue and to respond to the consultation process as events unfold.