Northern Ireland risks losing out more than ever to the Republic from next year when corporation tax becomes double that of our neighbour, it has been claimed by accountants in Belfast.
The Republic’s historic low-tax policy of charging just 12.5% has helped lure huge companies like TikTok, Google, Apple and Facebook to set up over the border.
Northern Ireland has lost out as a result and discussions over lowering our corporation tax have not resulted in action.
From April next year, the main rate of corporation tax in the UK will increase from 19% to 25%. The EU and OECD have looked at changing rules so that a minimum rate of 15% would apply.
The UK’s move to a 25% rate will make Northern Ireland a less attractive spot when compared to the Republic.
In addition, the Republic retained its full membership of the EU, which is another selling point. However, Northern Ireland remains within the single market for goods, under the terms of the Protocol.
Accountants in Belfast explain there are lost opportunities for investment which could hinder economic growth.
According to the Department for International Trade, foreign direct investment projects here created 2,351 new jobs in 2019-20.
Factors in the Republic such as higher income tax could work against it. The cost of living is also much higher over the border.
This is something that will have to be assessed on a case-by-case basis, but a corporation tax rate that is half that of Northern Ireland’s may ultimately encourage investors to gravitate towards the Republic.”
Businesses in Northern Ireland need to begin preparations for the new tax regime as soon as possible.
My advice to local businesses would be to reassess your business structure both within the UK and EU to ensure that you get the best rates available
Updated structures may be quite different and you will need to implement a quality business plan and use good financial management to get the most from these changes.
With soaring inflation and a new era of supply chain insecurity, businesses need to plan more carefully than ever.
Read our full article as accountants in Belfast here : https://www.belfasttelegraph.co.uk/business/northern-ireland/uk-move-to-25-corporation-tax-will-lure-even-more-investors-to-the-republic-41585743.html or find our latest posts by viewing our news section http://rossboyd.co.uk/category/news/