The Corporation Tax (Northern Ireland) Bill was published on 8th January 2015. The British Government hopes the Bill will be passed before the UK General Election in May.
The Bill, if passed, would allow Northern Ireland to apply its new Corporation Tax rate on most trading profits from April 2015.
The current rate paid by companies in Northern Ireland is 21% while the rate in the Republic of Ireland is 12½%.
According to the UK Government Press Release “if the rate was lowered, around 34,000 businesses in Northern Ireland would stand to benefit including 26,500 SMEs.”
Theresa Villiers, the Secretary of State for Northern Ireland believes the Corporation Tax Bill has the potential “to create thousands of new jobs and stimulate crucial growth in the Northern Ireland Economy.”
It is important to remember that even if the Bill is passed, the headline UK Corporation Tax rate will continue to apply to profits from a non-trading source (i.e. property) and the UK will retain power over the Corporation Tax base including Allowances and Reliefs.
The design of the Bill reflects the following principles:
Profits from some trades will remain in the UK main regime including:
The UKs Oil and Gas Tax Regime will remain part of the UK regime.
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