6 county corporation tax

[armaghniac]

It seems that the 6 counties might get some sort of deal on the Corporation tax provided that they do a deal otherwise and reorganise the finances.
I'm not sure of the details of this, but it will require some maturity from the folks on the hill and that would be very welcome.

If it works, it makes the 6 counties more like the rest of the country and so helps remove the economic basket case issue from the border debate.
If it doesn't work because of limitations set by London etc it illustrates the limitations of the present constitutional setup.

[Armamike]

If you were London would you trust them to manage anything?  Don't know about this, could lead to more jobs but also a lot more pain for people hit by further cuts to compensate. The pressure would be on Invest to get more FDI.

[TabClear]

Big risk to trust those Muppets on the hill to manage something as transformational as this. Cue a 24 month delay while the DUP and SF argue about what fleg is on the letterhead for the remittance advice!

I hope it works, this is the only way I can see NI getting to a more balanced economy in terms of public/private sector. We need to attract more FDI to replace the inevitable job losses in the public sector and this could be a game changer. It will not be easy or quick but it has to happen to compete with ROI.

[Throw ball]

Firstly it will be hard to see an agreement reached for this actually to happen.

In an ideal world Stormont could set its own corporation tax rate. A major problem though is that a lower corporation tax rate would probably mean a lower block grant as London will not suffer the loss to the overall tax take for the country. We are then basically gambling that businesses will choose to come to Northern Ireland for the lower tax and that this will result in an increase in the overall tax take. We also have to hope that we have the right people negotiating our part of the deal with London. Undoubtedly something has to be done to help the economy but does anyone really think we have the people in charge to deliver.

[TabClear]

Firstly it will be hard to see an agreement reached for this actually to happen.

In an ideal world Stormont could set its own corporation tax rate. A major problem though is that a lower corporation tax rate would probably mean a lower block grant as London will not suffer the loss to the overall tax take for the country. We are then basically gambling that businesses will choose to come to Northern Ireland for the lower tax and that this will result in an increase in the overall tax take. We also have to hope that we have the right people negotiating our part of the deal with London. Undoubtedly something has to be done to help the economy but does anyone really think we have the people in charge to deliver.

I don't know the detail on this but I think EU law prohibits a "free lunch" in terms of increasing tax take.but retaining the same amount of central funds I.e. the block grant. Could be wrong on whether it is actually prohibited but in any case I would be certain the Treasury would insist on the loss of tax revenue being "paid for" by NI from the block grant.

[muppet]

Firstly it will be hard to see an agreement reached for this actually to happen.

In an ideal world Stormont could set its own corporation tax rate. A major problem though is that a lower corporation tax rate would probably mean a lower block grant as London will not suffer the loss to the overall tax take for the country. We are then basically gambling that businesses will choose to come to Northern Ireland for the lower tax and that this will result in an increase in the overall tax take. We also have to hope that we have the right people negotiating our part of the deal with London. Undoubtedly something has to be done to help the economy but does anyone really think we have the people in charge to deliver.

I don't know the detail on this but I think EU law prohibits a "free lunch" in terms of increasing tax take.but retaining the same amount of central funds I.e. the block grant. Could be wrong on whether it is actually prohibited but in any case I would be certain the Treasury would insist on the loss of tax revenue being "paid for" by NI from the block grant.

I'm sure the EU could agree to something to facilitate progressing the peace, e.g. structural funds.

It might be easier for then to agree on something like this, rather than the eternal who are the bigger bastards row.

[heganboy]

so interesting point ref EU law, but not really a big issue. The total corp tax in NI (revenue) is 200M. and they get that back as part of the block grant. By deciding their own tax level they give up the 200M refund, but get to keep what they make in return.
That trade is really not a fair trade, the additional boost of attracting business to the economy by having a lower corp tax rate (but within not only the EU but also the UK)  make it virtually a no brainer

[TabClear]

so interesting point ref EU law, but not really a big issue. The total corp tax in NI (revenue) is 200M. and they get that back as part of the block grant. By deciding their own tax level they give up the 200M refund, but get to keep what they make in return.
That trade is really not a fair trade, the additional boost of attracting business to the economy by having a lower corp tax rate (but within not only the EU but also the UK)  make it virtually a no brainer

Agree that it should be a no brainer long term. What may be an issue is the transition period when fundsare so tight. I'm sure there are options available to address any cashflow issues short term.

Invest ni will be in the spotlight but the reality is that the people who are likely to c**k this up are.the politicians...And it won't be for economic reasons.

[omagh_gael]

Am I right in thinking there is a clause that if companies currently based in Britain move their operations to the North due to the lower Corp tax rate then we would be compensating the treasury for their lost business?

Really can't see the clowns in Stormont making this work anyway.

[armaghniac]

The calculation of benefit is complex.in the South the government gives a low tax rate to attract companies who employ people. This employment leads in turn to direct and indirect taxes and more spending. If the taxes increase in NI, how is that reflected in the calculations?

[Throw ball]

The calculation of benefit is complex.in the South the government gives a low tax rate to attract companies who employ people. This employment leads in turn to direct and indirect taxes and more spending. If the taxes increase in NI, how is that reflected in the calculations?

I am sure the whole ins and outs of this have not been agreed either. If more business comes to the north because of the lower tax rate and more jobs are created there should be lower benefits payable and a greater income tax and NIC take as well. I assume this goes to the exchequer and not Stormont. But. What happens if other areas see this working in the north and want the same power in their area. Wales, Scotland, the North East etc. will all want to set there own corporation tax rates. The result could then be that the North has lost the block grant but has not gained the extra business expected because they have decided to go to other regions. Despite EU protestations there is also the possibility that central government will decide to reduce corporation tax everywhere as the simple way to end tax avoidance strategies.

There is much to consider with no definite answer.

[Wildweasel74]

It not work, one, the politicans up here are incapable of running anything, we seen this at first hand, if they Had to work in a proper job half them be out the door,

Two, why would any company decide to move to the north or new company locate here, when they have the same tax down south minus the shit what happens in Belfast and Belfast who probably be the only place new companies would set up.

Any outside company would still choose down south first, the outside world do see the 12th carry on on TV every year

[TabClear]

It not work, one, the politicans up here are incapable of running anything, we seen this at first hand, if they Had to work in a proper job half them be out the door,

Two, why would any company decide to move to the north or new company locate here, when they have the same tax down south minus the shit what happens in Belfast and Belfast who probably be the only place new companies would set up.

Any outside company would still choose down south first, the outside world do see the 12th carry on on TV every year

Dont agree with this at all. If that held true, why would any company set up in NI at the minute??

Dont underestimate the attraction of trading in Sterling to a lot of US/Far East companies, both from a prestige perspective and a forex viewpoint. Depending on exchange rate movement/group structures etc could be a real consideration. If your key customer base is UK, why not report in the same currency if it is not to your detriment? Your primary bank is uk based?

Also, company law is different between UK/Ireland?

[magpie seanie]

Prostituting yourself at the altar of inward investment is a dangerous road to go down unless a well thought out plan is in place. With little domestic industry at present inward investment from multi nationals must be courted in the short to medium term so some kind of economy exists but there must be a plan to wean off the tit and stand on your own feet, relatively at some stage. I'm not saying foreign MNC's can ever be abandoned, they cannot but perhaps a few domestic ones can and should be developed with the right environment and re-investment.

[imtommygunn]

It not work, one, the politicans up here are incapable of running anything, we seen this at first hand, if they Had to work in a proper job half them be out the door,

Two, why would any company decide to move to the north or new company locate here, when they have the same tax down south minus the shit what happens in Belfast and Belfast who probably be the only place new companies would set up.

Any outside company would still choose down south first, the outside world do see the 12th carry on on TV every year

There's not really that much shit that goes on in Belfast though. I know papers like the Irish news talk up a lot of things but ultimately they're background and all you have in belfast is a 2 week shutdown in July. The morons in the papers all the time have little to no impact on day to day lives.

However as per what the allstate guy said would you really trust these guys to implement anything complex when they can't even agree on basic budget things and that's before you even get near "flegs" and marching. We don't have an "executive" who should be trusted with anything at present.