HMRC has updated its draft guidance on how the Northern Ireland corporation tax legislation will operate once the Northern Ireland rate has been set. It takes account of comments received during consultation on the first draft published in September 2016, and incorporates changes made by Finance (No 2) Act 2017, including an extended definition of ‘Northern Ireland company’. The government will not commence the Act until a restored Northern Ireland Executive demonstrates its finances are on a sustainable footing. When finalised, this guidance will be incorporated into a new HMRC manual.
The revised version takes account of comments received during consultation and incorporates changes made to the legislation in Finance (No 2) Act 2017, including the option for SMEs which do not meet the employment test, but have a trading presence in Northern Ireland, to elect to be a ‘Northern Ireland company’ and use the rules applying to large companies. The draft guidance may be refined further prior to the devolution of the corporation tax rate-setting power to the Northern Ireland Assembly.
The regime will apply in relation to ‘Northern Ireland profits or losses’, as distinct from ‘mainstream profits or losses’. The Northern Ireland rate will apply to the qualifying profits of companies (or partnerships) falling into two categories: micro-businesses and SMEs; or large companies.
HMRC has updated its draft guidance on how the Northern Ireland corporation tax legislation will operate once the Northern Ireland rate has been set. It takes account of comments received during consultation on the first draft published in September 2016, and incorporates changes made by Finance (No 2) Act 2017, including an extended definition of ‘Northern Ireland company’. The government will not commence the Act until a restored Northern Ireland Executive demonstrates its finances are on a sustainable footing. When finalised, this guidance will be incorporated into a new HMRC manual.
The revised version takes account of comments received during consultation and incorporates changes made to the legislation in Finance (No 2) Act 2017, including the option for SMEs which do not meet the employment test, but have a trading presence in Northern Ireland, to elect to be a ‘Northern Ireland company’ and use the rules applying to large companies. The draft guidance may be refined further prior to the devolution of the corporation tax rate-setting power to the Northern Ireland Assembly.
The regime will apply in relation to ‘Northern Ireland profits or losses’, as distinct from ‘mainstream profits or losses’. The Northern Ireland rate will apply to the qualifying profits of companies (or partnerships) falling into two categories: micro-businesses and SMEs; or large companies.