Boost for business as tax returns to enter digital age
Northern Ireland's business community celebrated a series of enterprise-friendly measures in the Budget, including the digitisation of tax returns.
Chancellor George Osborne announced the scrapping of paper tax returns by 2020 and a switch to an online system, which is hoped will free small businesses from unnecessary bureaucracy.
Wilfred Mitchell, policy chair for the Federation of Small Businesses in Northern Ireland said the changes will allow SMEs to spend more time growing their businesses. "We are especially pleased that the idea for a single digital tax account is being taken forward," he said.
"Implemented properly, this should reduce the time businesses take to complete their tax returns, and offers opportunities to deliver targeted support and therefore we look forward to further details."
Peter Legge, tax partner at Grant Thornton (NI), said businesses should still tread carefully.
"The abolishment of the personal tax return will be also be welcomed by small businesses but many will need advice to avoid falling foul of thousands of pages of legislation," he said.
The Chancellor announced corporation tax in the UK will be cut to 20%, while the Bill that will see the tax devolved to Northern Ireland to 12.5% - in line with the Republic's rate - passed through the House of Lords on Tuesday.
Stephen Kelly, chief executive of Manufacturing NI, said the cut to the UK rate of corporation tax will mean a lower cost for the Executive to bear in the event when our tax rate is reduced.
"With the now confirmed rate of UK corporation tax falling to 20% from April, the potential 'cost' of a reduced regime in Northern Ireland is more affordable than some commentators are quoting," he said.
"It's critical now that we seize the opportunity by setting a date and rate releasing capital to invest in businesses and giving Invest NI and others the opportunity to get out and secure FDI investments."
Mr Osborne has increased the personal income tax allowance again, so that from next year workers will have £10,800 before they start paying income tax. In 2017 this will increase to £11,000.
Richard Ramsey, Ulster Bank chief economist, said this will have a greater impact on Northern Ireland, as incomes are lower here.
The CBI said the increase in the income tax thresholds should help create jobs.
Nigel Smyth, director of CBI Northern Ireland, said: "This Budget has some encouraging measures to help businesses create jobs for the benefit of all."
Danske Bank chief economist Angela McGowan said there were no big giveaways for consumers in the Budget, apart from a new Isa scheme for first-time buyers to help them raise deposits for property, a measure aimed at helping potential buyers in the over-heated English market.