There is a convincing case for reducing the corporation tax rate in Northern Ireland, according to the House of Commons Northern Ireland Affairs Committee.
There is a convincing case for reducing the corporation tax rate in Northern Ireland, according to the House of Commons Northern Ireland Affairs Committee.
‘In addition to the impact of the Troubles, Northern Ireland is the only part of the UK with a land border with another sovereign state, which has a headline corporation tax rate of 12.5%,’ the Committee noted. The Republic of Ireland had ‘doggedly held on to’ its low tax rate during the recent EU bailout negotiations.
But the MPs identified ‘considerable implementation issues’ and administrative hurdles for HM Treasury and HMRC. ‘A low rate of corporation tax is advantageous, but on its own would not be a panacea for all Northern Ireland's economic ills,’ they said.
The CIOT’s Tax Policy Director, John Whiting, said: ‘The position of a company that only operates in Northern Ireland would be clear, but a UK-wide trader would have to derive its Northern Ireland profits figure. The risk is that new rules could generate significant admin burdens for businesses and additional policing for HMRC.’
Consultation on proposals to ‘rebalance’ the Northern Ireland economy closes on 24 June.
There is a convincing case for reducing the corporation tax rate in Northern Ireland, according to the House of Commons Northern Ireland Affairs Committee.
There is a convincing case for reducing the corporation tax rate in Northern Ireland, according to the House of Commons Northern Ireland Affairs Committee.
‘In addition to the impact of the Troubles, Northern Ireland is the only part of the UK with a land border with another sovereign state, which has a headline corporation tax rate of 12.5%,’ the Committee noted. The Republic of Ireland had ‘doggedly held on to’ its low tax rate during the recent EU bailout negotiations.
But the MPs identified ‘considerable implementation issues’ and administrative hurdles for HM Treasury and HMRC. ‘A low rate of corporation tax is advantageous, but on its own would not be a panacea for all Northern Ireland's economic ills,’ they said.
The CIOT’s Tax Policy Director, John Whiting, said: ‘The position of a company that only operates in Northern Ireland would be clear, but a UK-wide trader would have to derive its Northern Ireland profits figure. The risk is that new rules could generate significant admin burdens for businesses and additional policing for HMRC.’
Consultation on proposals to ‘rebalance’ the Northern Ireland economy closes on 24 June.
