Budget 2026 misses the mark for Northern Ireland businesses says Chartered Accountants Ireland
The UK Budget offers little of immediate assistance to businesses in Northern Ireland and represents a missed opportunity to unlock the region’s economic potential through targeted tax reforms and reduced labour mobility costs, Chartered Accountants Ireland has said.
The Institute, which represents more than 5,900 members in the region, has called on the UK Government to support Northern Ireland’s unique economic position through targeted measures to:
• address the barriers to and high costs of cross-border working,
• provide a roadmap towards a competitive Northern Ireland corporation tax rate, and
• progress much-needed reform to rationalise the tax system for businesses and individuals.
Cost pressures remain a key challenge for business
Among Chartered Accountants Ireland members surveyed earlier this year, 95% cited the rising cost of doing business as a major negative factor, alongside taxation, energy costs and wider public finance pressures.
According to the Institute, measures to facilitate cross-border labour mobility and encourage long-term investment were missing from today’s Budget. Ultimately these would have helped businesses in Northern Ireland to grow and compete internationally.
Ongoing high employment and labour mobility costs, and having to plan for and fund uncertainties and deal with trading frictions post EU exit continue to constrain investment and job creation in the region.
Leontia Doran, UK Tax Manager at Chartered Accountants Ireland, said: “For many years, complex legislation and growing compliance obligations have continually created unnecessary costs for taxpayers and businesses, particularly SMEs. Businesses in Northern Ireland are also incurring additional costs as a result of the complexity of cross-border labour mobility, with many having to operate and manage payroll obligations in both the UK and Ireland for their cross-border and remote/hybrid workers. A simpler, more efficient system would improve business certainty, reduce administrative burdens and support entrepreneurial activity.
“How tax policy is developed and implemented is equally important. Regional differences must be considered from the outset, and not as an afterthought at the time of policy implementation. New or reformed obligations should be proportionate, developed through meaningful consultation and introduced with adequate lead-in times. Policymakers must strike the right balance between achieving their policy objectives and avoiding unnecessary burdens on businesses and taxpayers.”
Lower rate of corporation tax for Northern Ireland
Chartered Accountants Ireland’s members across Northern Ireland’s business and finance community have consistently supported a corporation tax rate at least on a par with the rest of the island. In a survey earlier this year, 85% of respondents said a more competitive rate would fundamentally change Northern Ireland’s economic landscape.
Leontia Doran continued: “With the Chancellor using the Budget today to begin deepening devolution in England, 2028 presents a timely opportunity to reconsider Northern Ireland’s long-standing case for corporation tax devolution.
“The 1998 Good Friday Agreement and the 2023 Windsor Framework both show what can be achieved through partnership, ambition, joined-up thinking, and trust. In 2028 these both reach milestone anniversaries. Against the backdrop of the circumstances in which those agreements were reached, devolving the power to set a corporation tax rate appropriate for Northern Ireland should now be seriously considered.
“Crucial to unlocking the economic potential of Northern Ireland is a tax framework which reflects the region’s distinct economic and geographic circumstances; this would also help meet the Chancellor’s ambition of rebalancing regional differences across the UK by achieving growth in every postcode. The Government should start this process by commissioning an up-to-date economic assessment and costs versus benefits analysis of a lower rate of corporation tax for Northern Ireland.”
Dual market access
Businesses in Northern Ireland operate within a unique economic and regulatory environment. Although dual-market access offers significant advantages, those businesses are also dealing with additional administrative requirements, rising costs and continued economic uncertainty.
Despite Northern Ireland’s access to both UK and EU markets under post-Brexit arrangements, the economic potential of dual-market access has yet to be realised.
Doran continued: “Whilst corporation tax devolution would help mobilise investment across the region, tackling the barriers to cross-border working on the island of Ireland is an urgent aspect of UK tax policy that needs to be addressed.
“We are therefore calling on Westminster and the Irish Government to jointly commit to establishing a frictionless all-island labour market and deliver on the promise made by both Governments in March this year. Together with a lower corporation tax rate, these measures would put Northern Ireland on a path towards fully realising its economic potential.”