Belfast Telegraph

Northern Ireland gives a cool reception to Osborne

Little joy for business and entrepreneurs in Chancellor's measures

By Margaret Canning

Businesses were quick to challenge whether the Budget contained good news for Northern Ireland. Some interpreted the gradual cut in corporation tax to 22% by 2014 as a sign of good things to come for Northern Ireland's campaign to have its own lower rate of business tax.

Chancellor George Osborne said the wind-down to 22% was "the biggest sustained reduction in business tax rates in a generation".

His much-signposted cut in the top rate of income tax to 45% was given a favourable reception by business people.

But smokers could be forgiven for feeling hard done-by after being hit with a 5% rise in tobacco duty while tipplers escaped any rise in alcohol duty.

The withdrawal of child benefit for high earners was also softened, as the chancellor unveiled a gradual reduction for households where a breadwinner brought home more than £50,000 per year.

Jim Andrew of TaxAssist Accountants in Belfast said the Budget contained nothing for sole traders and small firms.

He said: "The cut in corporation tax only applies to firms with profits of over £300,000. The majority of small businesses will have nowhere near that figure, but there is no cut in the 20% rate they pay."

Groups were positive about the chancellor's passing mention of an 'enterprise zone' for Northern Ireland to encourage growth.

Nigel Smyth, director of the CBI in Northern Ireland, said he was disappointed by a lack of detail about an enterprise zone.

But he said: "Businesses will welcome the chancellor's decision to improve the competitiveness of the UK's tax system for companies and entrepreneurs.

"The further 1% reduction in corporation tax is welcome - with a need to transform the Northern Ireland economy by reducing corporate tax to 12.5% this will reduce the cost of achieving this goal with a decision required by the summer.

"Smaller firms will also welcome the proposals to simplify the tax system, but businesses will be disappointed that he did not do more to cut red tape and reduce the barriers to hiring staff and creating new jobs."

Neil Gibson, economic adviser to Ernst -amp; Young, said the Budget would not alter its Economic Eye forecast of 0.4% growth for the Northern Ireland economy in 2012 and 1.6% next year.

The Federation of Small Businesses (FSB) said the chancellor had responded "positively" to some of its demands such as simplifying taxes for the smallest businesses, raising Vat threshold to £77,000 and reducing health and safety rules.

Mervyn Watley, director of the Northern Ireland Science Park, welcomed the announcement that Belfast would be one of 10 cities benefiting from £100m in Treasury cash to improve the speed of broadband connections: "To fully harness the clear innovative talent and ambition that we have in Northern Ireland we need to have access to the best infrastructure and connectivity is an important part of the overall jigsaw."

But Marty Neill, founder of technology company AirPOS, said the Budget did not have enough in it to encourage entrepreneurs.

Ann McGregor, chief executive of Northern Ireland Chamber of Commerce, said: "The chancellor has tabled a number of measures which offer some assistance to business but there's more that he could have done ... and should be done as soon as practicable."

The UK-wide cut in corporation tax was not enough for Northern Ireland, she said, and access to finance and reducing bureaucratic burdens needed more consideration.

She added: "We are not convinced that private-sector job creation is being given the priority status it should have."

Richard Williams, chief executive of Northern Ireland Screen, applauded the tax incentives for TV production.

He said: "This is a bold move that will have a considerable positive impact on the economy when introduced in April 2013.."

The Northern Ireland Independent Retail Trade Association said the Budget lacked signs of a "coherent growth strategy" to help small businesses or boost consumer confidence.

Terry Canning, the founder of agri-technology firm FarmWizard, said: "I would have liked to have seen a cut in the Employer National Insurance Contributions."

22%

The amount to which corporation tax was cut by Chancellor Osborne

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