Belfast Telegraph article 17 June - "A power shift that will rev up the economy"

Contributing to the Belfast Telegraph's week long review of Corporation Tax, BDM Tax Director, Brendan Morris writes:-

"The power to set corporation tax rates is an exciting opportunity. Ownership of a key economic lever would be an ‘early win' for the new Executive and could be seen as an indicator of its increasing autonomy and stability.  A big rate cut could send a message that we see ourselves becoming a more entrepreneurial society with the private sector making up a growing share of our economy.  As the shop window for a wider package of enterprise-friendly measures, it could help grab the attention of the international business community.

As I've said in previous articles in this series, it is not a one-way bet. Alongside the loss of revenue for the Executive (we still need to know the corporation tax figures to assess the economics), there is an additional administrative burden.  A change in the rate would be simple for a company operating solely in Northern Ireland, but one operating across the UK would have to spend time calculating the profits earned in Northern Ireland. Then HMRC may wish to police the split closely, to make sure businesses are not wrongly assigning profits to Northern Ireland, rather than the rest of the UK, to save money.

Although driven by economics, the devolution of tax rates has political implications. It alters the balance of power between Westminster and Stormont (and indeed Westminster and the other devolved bodies, as anything Stormont gets, Holyrood and Cardiff Bay are likely to demand). For ministers at Westminster, deciding whether to grant this additional power is likely to weigh as heavily as the economic considerations."