Opportunity for lower corporation tax rate in Northern Ireland 'should not be forgotten'

The lack of a Stormont Executive is compounding the pressures of increased tax bills and continued high inflation on businesses, according to Chartered Accountants Ireland.

The Institute represents over 5,200 members working in businesses and practices across Northern Ireland, more than two thirds of whom work in business. The body made these remarks as the new higher corporation tax rates became operational.

Dr Brian Keegan, director of Public Affairs, Chartered Accountants Ireland, said: “From this month, many companies in Northern Ireland are facing a tax bill of 25%, double that of their counterparts in Ireland. Ultimately this means even lower after-tax profits and less cash to invest, drive company growth, and reward employees.

“Despite this, Northern Ireland companies have a number of unique opportunities to mitigate against this increase which should not be ignored. The potential for a lower corporation tax rate to match the rate in Ireland is just one opportunity.

“A lower rate of corporation tax would put Northern Ireland in a strong position to attract FDI, particularly in the manufacturing and distribution sectors, and would drive investment and expansion by local companies, leading to the creation of more high-value jobs and improved wage offerings.”

Last May, the Fiscal Commission’s final report set out the economic benefits to be achieved from a lower rate whilst also recognising the risks and complexities which would need to be managed.

Brian added: “We agree with the Commission’s analysis of these economic benefits which also flagged the constructive engagement required from both the NI Executive and HM Treasury to activate a NI corporation tax rate.

“Without an Executive in place, this work simply cannot begin leaving Northern Ireland companies at the mercy of a further squeeze on their cash resources.”

Zara Duffy, head of Northern Ireland at Chartered Accountants Ireland, explained: “Northern Ireland companies and businesses are already capitalising on their unique access to the EU’s single market for goods under the Protocol. From September this year, improved access to the UK’s internal market will also be available under the Windsor Framework via the new green channel arrangements.

“A recent survey of our members identified the Windsor Framework as a significant opportunity for Northern Ireland. Companies need an Executive in place in order to seize this opportunity and ensure that the revised trading arrangements are implemented in a way that supports businesses.”

Zara concluded: "The higher corporation tax bill which many companies are facing is just one of a myriad of issues in the region in dire need of attention. Major challenges in health, education and the economy cannot be addressed unless our Executive gets back to work. The milestone 25th anniversary of the Good Friday / Belfast Agreement should be grasped. Northern Ireland needs its political leaders to work together for the benefit of the whole region.”