Belfast Telegraph

Saturday 1 November 2014

Step by step, the move to cut corporation tax gathers pace

Money man: Chancellor George Osborne holds key to tax cuts

The battle for business support for the transfer of authority for decision making on corporation tax to the Northern Ireland Assembly has, with few exceptions, been won. The business community is now moving on to the next stage.

There is still some uncertainty about support from all the main politicians. That may be a minor hesitation. Some assurances on the processes and impact will legitimately be sought. The greater level of uncertainty is whether the Treasury and the Treasury ministers are fully committed to implement the delegation of corporation tax powers, either partially or fully, to the Assembly and local ministers. This week the representatives of the business community will launch an intensive effort to make sure that the Treasury knows that the scheme is welcomed.

George Osborne will not be able to complain that the consultative ideas have attracted little support. The Grow Northern Ireland campaign is based on over 20 business-related organisations. The subtitle, Reduce Corporation Tax, makes the indirect aspiration clear.

In the next few weeks the Grow NI campaign is making the ambition for reduced taxation even stronger. Mervyn McCall, chairman of the IoD in Northern Ireland, believes the Grow NI campaign might be described as "the final push to encourage as many businesses and organisations as possible to voice their support for a reduction in corporation tax".

Grow NI is right to be cautious about the attitude in the Treasury. The reports leading to the rejection by Sir David Varney of the earlier appeal for changed responsibility for corporation tax are still fresh and not to be ignored. Mervyn McCall describes Grow NI as "primarily a lobby group and the first objective is to encourage businesses to respond directly to the Treasury consultation by June 24''. "As chairman of IoD, I will be writing to every member to ask them to reply directly to the Treasury,'' he says.

He adds: "We also need to demonstrate that the business community at large wants our Assembly and Executive to seek the devolution of fiscal powers and then to use those powers wisely to encourage economic growth and job creation."

The newly-formed group consists of the Business Alliance and all the bodies behind the Jobs Plan, as well as several top accountancy practices, along with other business and professional organisations and universities.

Decisions on how to use the delegated decision making, the phasing of the introduction of tax changes, the use of flexibility in setting tax credits or allowances, and the modification of any 'double taxation' agreements will all require analysis and debate.

In parallel, the local Minister for Finance is expected to prepare proposals on the application of an Enterprise Zone across Northern Ireland.

Debate on the economy for political and business leaders is entering a demanding phase.

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