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Stormont and HMRC begin paving the way for cuts to corporation tax

By John Mulgrew

Published 25/11/2016

Preparations: Mairtin O Muilleoir
Preparations: Mairtin O Muilleoir

Stormont is already working alongside HMRC to ensure IT and other operational systems are prepared for the slashing of corporation tax in Northern Ireland, it has emerged.

The Executive is preparing to cut the business levy rate to 12.5% in April 2018.

Finance Minister Mairtin O Muilleoir has said that "comprehensive preparations are being made to pave the way for the devolution of corporation tax".

"I met recently with the chief secretary to the Treasury to discuss how we continue to take forward this important work. In particular, my department is working alongside HMRC to ensure that IT and other operational systems are in place for the successful delivery of a reduced corporation tax rate.

"My officials have also been liaising with their counterparts in the British Treasury and Revenue and Customs to examine the basis of the estimated costs that will be applied when we devolve corporation tax.

"And following the very positive engagements I had with influential allies in the US, I have every confidence that the reduced rate will help boost investment, drive economic growth and deliver more jobs and higher wages for our people."

Business leaders and politicians have long been seeking a lower tax rate for Northern Ireland to bring it in line with tax paid in the Republic.

Some have suggested bringing the rate down to as low as 10%.

Head of Invest NI, Alastair Hamilton, has said the planned cut in corporation tax has generated strong interest from overseas investors.

And he played down the effects of global uncertainty, adding that arrangements in Northern Ireland were "future-proofed".

"We have got that rate and date and that is a critical piece for us to get out there and sell it," he said.

But since the agreement to devolve corporation tax powers, there have been reports the UK Government could respond to a hard Brexit by reducing the nationwide rate to as low as 10%, negating the potential attractiveness of reducing the Northern Ireland rate.

US President-elect Donald Trump has said he will cut America's rate to 15% from 35%.

A report earlier this year by the Ulster University Economic Policy Centre claimed that around 32,000 jobs could be created and an additional £4bn generated for the Northern Ireland economy over the next 15 years as a result of cutting corporation tax.

Belfast Telegraph

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