Ahead of next Tuesday’s Budget, Chartered Accountants Ireland has responded to the apparent commitment of the new Government in Westminster towards business regeneration and renewal for Northern Ireland.
For several years Chartered Accountants Ireland has consistently called on Government for mechanisms to reduce the corporation tax rate in Northern Ireland which it believes is key to economic growth in Northern Ireland and this message is re-iterated in its Pre-Budget Submission ahead of next Tuesday.
Chair of the Northern Ireland Taxation Committee for Chartered Accountants Ireland Mr Eamonn Donaghy said:
"We are advocating that progressive tax elements in the Coalition’s Programme for Government need to be implemented as a matter of urgency and look forward to hearing next Tuesday how that will be achieved. Northern Ireland needs to boost economic prosperity and rapid job growth by attracting high value added Foreign Direct Investment. There remains a pressing need for commercially aligned tax measures to assist with economic development and growth of the private sector in NI and one of the key ways of doing this is to offer a low 12.5% rate of corporation tax.”
“Furthermore, our Pre-Budget submission takes the Government proposal for this region a stage further and calls for a number of additional focused NI specific measures to help achieve this”
“We believe that, coupled with a lower rate of corporation tax, measures such as a Northern Ireland specific Research & Development tax relief should be implemented as well as considering a wider definition of what constitutes R&D expenditure. Many NI businesses are still not aware of R&D relief or are not aware of how to go about successfully claiming the relief. This is recognised by HM Revenue & Customs who have specifically produced concise guidance material, this information dissemination initiative is also supported by public access to the R&D Specialist Units in HMRC.”
“However we suggest that this initiative needs to go further and must be coupled with more attractive reliefs specifically for Northern Ireland.”
Mr Donaghy commented further on the ongoing concern regarding the tax treatment of conacre lettings in Northern Ireland and called for the reopening of dialogue on this issue with the new Government”.
Chartered Accountants Ireland has also recommended that the Government rethink their proposal to increase the rate of Capital Gains Tax.
The organisation has asked the Government to carry out a full impact assessment and review before making any change to the rate of Capital Gains Tax.
Eamonn Donaghy commented “We are concerned that increasing capital gains tax rates will result in lower levels of capital investment and transactions levels in the UK and NI. This will potentially lead to a decrease rather than an increase in overall tax revenues from Capital Gains Tax.”
“Many assets held are part of people's future wealth, financial and inheritance planning. Often property and/or shares are held as part of a carefully balanced portfolio. Any major tax changes will upset that balance at a time when many portfolios have already been damaged by falling investment values and property prices. We refute the idea that CGT is primarily a tax on ‘the rich’, and argue instead that an increase in Capital Gains Tax will also hit families and individuals.”
“The proposal to increase the rate of Capital Gains Tax measures should therefore be put on hold until at least a thorough review can be carried out to determine if there is a case to support increasing the rate of capital gains tax and an impact assessment of an increase.”
Chartered Accountants Ireland’s Pre-Budget submission is available in full on its website at
CAI Pre-Budget Submission 2010