New NI Corporation Tax Rate ‘Unlikely’ In 2017
Northern Ireland’s Finance Minister, Arlene Foster, has acknowledged that it is unlikely that Northern Ireland will introduce a lower corporation tax rate from April 2017.
Foster was responding to a parliamentary question on the impact the delay in deciding on a date and rate for corporation tax would have on the Northern Ireland economy.
Corporation tax powers are due to be devolved as part of the December 2014 Stormont House Agreement, which stipulates that, in order to be allowed greater tax-setting powers, Northern Ireland’s power-sharing parties must get the territory’s budget under control.
As Foster noted, “the implementation of welfare reform is critical to implementing the agreement; it unlocks all the other issues that were agreed in the Stormont House Agreement … but, because of the non-implementation of welfare reform, we find ourselves back as if the Stormont House Agreement had not been agreed.”
Foster said it was “probably not going to be the case” that a new corporation tax rate would be introduced from April 2017, stating that that “time has gone.”
She explained that a corresponding adjustment to the block grant (money provided by the UK Government to fund day-to-day operations) would not be fully implemented until three years after the commencement of devolved corporation tax powers. “Given that we have not yet set a date for the devolution of corporation tax, that will be beyond 2020-21,” she said.
Foster said: “It is wrong to mix the cost of corporation tax up with welfare reform costs because the Office for Budget Responsibility has indicated that revenue will be more readily available [in 2020-21], and we will start coming out of a deficit position. So there will be more money available in 2020-21 to deal with those issues.”
Source: tax-news.com
