Lower corporation tax rate for Northern Ireland is still within its grasp as Belfast's investment summit showcases the best the region has to offer

Lack of a Northern Ireland Executive continues to hamper companies in the region from fully realising the potential of all the unique opportunities open to them, with many facing a tax bill double that of their counterparts in Ireland where the corporation tax rate is 12.5%, according to Chartered Accountants Ireland.

The Institute, which represents over 5,000 members in Northern Ireland, more than two thirds of whom work in business, made these remarks as Northern Ireland this week hosts an investment summit exhibiting to business leaders and prospective investors the best that the region has to offer.

Janette Burns, chair of the Northern Ireland Tax Committee of Chartered Accountants Ireland, said: “In the year of the 25th anniversary of the Good Friday (Belfast) agreement, the Investment Summit taking place this week is an opportunity for over 100 leading investors and international businesses to see first-hand the talent, and expertise that Northern Ireland has to offer, not least in the innovation and technology sectors.

“However, we can’t overlook the fact that the cash flow of many companies here is taking a significant hit with corporation tax bills up by almost 32%. Coupled with ongoing inflationary pressures, this ultimately means significantly lower after-tax profits, and less cash for investment to drive company growth and expansion, reward employees, and create high value employment.

“The UK Government clearly recognises Northern Ireland’s unique position. Now is the time for our politicians to grasp this additional opportunity. A rate of 12.5%, matching that in Ireland, would give Northern Ireland companies a real competitive edge in attracting foreign direct investment and energising indigenous businesses to thrive and prosper.

“The economic benefits of a lower rate and the steps needed to implement it are well known and were highlighted again recently by the work of the Fiscal Commission. But we need our Executive back in situ to start the ball rolling on this and many other urgent issues in education, childcare, the economy, and health. Northern Ireland’s business leaders want our politicians to get on with this work in order to transform the region into a truly dynamic and attractive place to invest, do business, live, and work.”

Paul Millar, chairman of Chartered Accountants Ulster Society, added: “Last year we met with HM Treasury to discuss the economic benefits that a lower corporation tax rate would bring to the region where we also took the opportunity to highlight the potential for flexibilities to manage the impact of a reduction on Northern Ireland’s block grant. From the end of this month, improved access to the UK’s internal market will also be available under the Windsor Framework via the new green channel arrangements.

“Although there have been rumblings from several of the main political parties in recent months about the potential for a lower rate, what we’ve seen so far is not action, but soundbites. This does not help pay the tax bills of Northern Ireland companies, many of whom are in dire need of additional cash flow to enable them to fully realise and capitalise on our unique trading access to both the UK’s internal market and the EU’s single market.”

Paul concluded: “Northern Ireland companies have dealt with crisis after crisis in the last few years, but many remain adaptive and resilient. They now need to be given the tools to flourish. As inflation begins to fall, now is the time for our politicians to act and get back into government. We encourage them to grasp this transformative change and take the steps needed to begin implementation of a lower corporation tax rate.

“We urge our political parties to set aside party concerns and work together for the benefit of the whole region and its citizens.”