Warm welcome for scrapping of 50% tax rate
High earners in Northern Ireland could breathe a sigh of relief as the Chancellor abolished the 50p tax rate.
According to HMRC estimates, there are 4,000 big earners in Northern Ireland raking in over £150,000 per year.
From April next year instead of paying 50% tax on their earnings over that sum, they will pay 45%.
Chancellor George Osborne said the older rate, which was introduced by his Labour predecessor Alistair Darling in 2010, had damaged British competitiveness and collected just one third of the anticipated £3bn.
Entrepreneur Grainne Kelly, founder of inflatable child-seat maker BubbleBum, welcomed the lowering of the top rate.
"I think the income tax rate being cut to 45% is great as it will keep entrepreneurs in Northern Ireland.
"They are the job creators.
"It's an encouraging sign for the type of business which we are as we can operate out of anywhere but we choose to stay here."
She said she anticipated being liable for income tax at the top rate from next year and that the cut would encourage her to retain her main operations in Northern Ireland.
Her business, which now sells its products in Asda stores in the UK, employs three people in Northern Ireland, one in England and two in America.
Robert Heron, tax partner at business advisers Ernst -amp; Young, said: "In a recent Ernst -amp; Young survey almost 30% of businesses quoted the 50p rate of income tax as being the biggest deterrent to growing their business in the UK.
"The Chancellor has clearly listened to these concerns and responded by reducing the top rate of income tax to 45p although the 45p rate still remains one of the highest in the G20."
Michael Black, chairman of the Chartered Accountants Ulster Society, said that the tax cut reflected the flavour of the Budget as a whole.
"A key message from the Chancellor was that high tax rates are counter-productive.
"They discourage business activity, while not raising much additional tax."
The raising of the tax-free personal allowance threshold to £9,205 was also good news, he added.
"Lower paid workers in Northern Ireland will benefit directly."