Tax powers: Are they a silver bullet?
Fifteen of our top business people give their views on the effects of a handover.
PAUL ALLEN CEO OF TAYTO GROUP
While I welcome the Chancellor’s decision to devolve to the Assembly the powers to set corporation tax levels, I believe it’s a move which may have greater impact on non-manufacturing businesses. As we are currently involved in a major programme of investment across our sites, improvement and acceleration of capital allowances could be more significant for us. The test here is the clear condition that the Executive must show itself capable of agreement on this matter, putting the onus firmly on our politicians to prove they can deliver a thoroughly-considered package which will benefit businesses. A case of putting our money where their mouths are, perhaps?
BEN COLLINS DIRECTOR, RICS NI
Whilst we would have preferred movement now, we do welcome the Chancellor’s comments about his support for the devolution of powers over corporation tax to Northern Ireland. The onus is now on the NI Executive to demonstrate that it can make progress on key issues like welfare reform. It is also important that Northern Ireland continues to work in the meantime on some of the other foundation stones for attracting inward investment, such as enhancing our infrastructure, encouraging more Grade A office space, developing the skills of our workforce and fostering a conductive social and political environment that is diverse, tolerant and outward-looking.
JIM ANDREW SPECIALIST, TAX ASSIST ACCOUNTANTS
Although we’ll have to wait until the outcome of the all-party talks, the signs are that the power to levy corporation tax will be devolved next year, which could be a major boost for many local business owners. The £500m lending pledge for small to medium-sized businesses through the Enterprise Finance Guarantee Scheme, plus a £400m extension to the British business bank Enterprise Capital Funds scheme, as well as extending the Funding for Lending scheme to boost bank lending to small to medium-sized businesses, is welcome news for local business owners seeking vital finance for growth, but we will watch closely to see how this is actually delivered.
OWEN PATERSON FORMER SECRETARY OF STATE
I am delighted that Northern Ireland will be given the powers to set its own rate of corporation tax. Creating a stronger private sector will benefit all sectors of the economy and reduce the significant sums of public money spent in Northern Ireland by Whitehall. There are huge benefits to getting the private sector going in Northern Ireland. It would transform society, bringing prosperity and jobs to the hardest-hit areas where things have been really tough in recent decades. By giving Stormont this tool, businesses can help grow the economy, grow tax revenues in Northern Ireland and reduce the dependency on the taxpayer.
LINDA BROWN INSTITUTE OF DIRECTORS NI
We would urge all parties currently involved in talks to show leadership in pursuit of a goal which already has cross-party support. The goal will herald a new dawn for the Northern Ireland economy, one of job creation, business expansion and the arrival of new international players to the local market. For many years the Institute of Directors has worked on behalf of its membership and with its partners in Grow NI to present the case for the devolution of corporation tax-varying powers. The devolution of corporation tax-varying powers will greatly assist in rebalancing the economy and preparing the foundations from which we can flourish.
IRENE McALEESE CO-FOUNDER, SEESENSE
Lowering corporation tax to compete directly with Ireland could encourage foreign direct investment. However, as a local small business, we feel the key is to grow businesses from within Northern Ireland. The support we’ve received from various economic support agencies has helped us transition from having an idea through to creating a business that now designs and manufactures in NI, and sells our innovative bike lights in 44 countries around the world. We have talented people here on our doorstep, so let’s grow our own success stories (like Chain Reaction Cycles, Moy Park, Data Analytics, and more) and not just become a lower-cost region for outsourcing.
WILFRED MITCHELL FEDERATION SMALL BUSINESSES
We welcome that the devolution of corporation tax powers is possible within the current parliament and will continue to press our local politicians to gain consensus in order to establish the stable society that business needs. The Chancellor’s decision is conditional and requires a subjective judgment that the NI Executive can show it is able to manage the financial implications. That creates uncertainty but, of more concern, is that the Chancellor committed to “introduce legislation” rather than “to legislate” in this Parliament. We must all strive to ensure this is an unequivocal commitment to transfer the power before this Parliament concludes in March 2015.
DES MOORE HEAD OF FIRST TRUST BANK
The devolution of corporation tax powers could be a strong economic lever, making the Northern Ireland economy much more attractive for inward investment. It will also help to encourage local indigenous businesses to invest in their own growth. Reducing the corporation tax rate in isolation will have little impact, its real benefit will only be fully realised if there is also focus placed on a range of other important economic factors including skills development and increased investment in research and development .
GLYNN ROBERTS CHIEF EXECUTIVE, NIIRTA
It is very welcome that the UK Government is in principle willing to devolve Corporation Tax. It is now critical that these game-changing powers are transferred to the NI Executive. Coming on the back of corporation tax reduction, more foreign direct investment will lead to more jobs, which will be a big long-term boost in spending for our local retail sector. We must ensure that we have the world-class skills and training to attract world class foreign direct investment. It is therefore essential that the proposed cuts to further and higher education do not proceed. Post-corporation tax, the next big challenge for the economy will be skills and training.
MICHAEL HALLEY (FORMERLY ERNST & YOUNG)
As expected, the Chancellor announced his intention to devolve all powers relating to Northern Ireland’s corporatetax rate to the Northern Ireland Assembly. This will take place in the current Parliament, on condition the Executive can show that it is able to manage the financial implications of doing so. This is a welcome measure and will strengthen Northern Ireland’s hand in competing for foreign direct investment and will boost its indigenous economy even further. Whilst the extent to which this measure may affect the allocation of central government funding to Northern Ireland remains unclear, overall, business will see this as a positive measure.
MICHAEL GUERIN DIRECTOR, MEDICARE PHARMACY
I think we need enablers to allow us to support indigenous businesses and to attract new businesses and provide employment for our young people who we are educating. A reduction would allow us some headroom for further investment in the business and for research and development into new technologies that can help with the introduction of robotics into the dispensing process — that would be an example of what we could do if there was a reduction. Northern Ireland is going to continue to struggle where we have a land border with a country that has a reduced rate of tax and we have don’t appear to have a Plan B in terms of how we can stimulate the economy.
IAN COULTER MANAGING PARTNER, TUGHANS
Sir George Quigley campaigned tirelessly for a lower rate of corporation tax for Northern Ireland and today we are indebted to him for his efforts as we move ever closer towards the finishing line. The Northern Ireland Executive has within its grasp a unique opportunity to rebalance the Northern Ireland economy, drive down the annual deficit and build much-needed profit centres. Ultimately, this is about improving people’s pay packets — our private sector average is £21,800, and this could take us up to £25,000 and beyond. Being able to set our own corporation tax is the most effective tool for us to do this.
PATRICK McALISKEY NOVOSCO MD
We hope to see movement as quickly as possible. A reduction in corporation tax would provide a number of significant benefits for the Northern Ireland economy, both in relation to attracting foreign direct investment and in terms of supporting high-growth indigenous companies like ourselves to invest and create employment locally. One of the key benefits for Novosco would be the increased competitiveness it would provide when we are pitching for work outside of Northern Ireland, which in turn would allow us to grow our Belfast headquarters. A lower rate of corporation tax would also enable us to invest more heavily in research and development.
KIERAN O'CONNOR LOUGHSHORE INVESTMENTS
We would be in favour of this; it can only be a good thing for Northern Ireland. I’m not sure it would directly impact our business particularly in terms of investment, but from looking at the impact it’s had in Dublin and the rest of the Republic of Ireland, with its lower rate, there have been some exceptional companies which have been attracted there because of it. It would certainly have a knock-on effect and would help attract companies and skills and would have a general trickle-down effect on the wider area of business start-ups. I believe it would have a general impact on the economy, particularly in the tech and financial technology sectors.
TERRY CANNING MD OF FARMWIZARD
I would be pretty delighted if it happens, it would certainly mean more money for FarmWizard, an agri-IT firm, to grow and reinvest. It also makes the company more attractive to outside investors which would help acquisition opportunities for the company and generate more wealth for the country. It would also be icing on the cake if it helps drive our politicians into doing a deal and getting back to running the country.