The planned hike in corporation tax to be paid by companies was scrapped by the new Chancellor Kwasi Kwarteng on Friday during the emergency mini budget announcement. The rate will remain at 19% and this announcement was welcomed by many business groups in Northern Ireland.
Welcome Interventions At A Critical Time
In the Belfast Newsletter, Northern Ireland Chamber of Commerce and Industry chief executive Ann McGregor, is quoted about the change of mind to scrap the rise in this tax, saying:
“Moves to target certain business costs, including reversing plans to increase corporation tax and national insurance are welcome interventions at a time of critical need.
“Reversing the planned increase in corporation tax will be crucial for local firms competing on the island of Ireland in particular.”
On the wider economic policy announcement by the chancellor, she said: “Businesses will welcome the chancellor’s pledge to focus on economic growth.
“ Inevitably, the devil will be in the detail of these proposals, but they must strike the right balance between tackling immediate pressures, driving reform, and providing for a sustainable future.”
Welcome Reversal Of National Insurance Increase
So a cautious welcome from Ann McGregor and in the same article Retail NI chief executive Glyn Roberts is quoted as saying:
“We welcome that the Government is to reverse the National Insurance increase which will provide some relief to local independent retailers who are struggling with the cost of business crisis.
“Retail NI will engage with the Secretary of State for NI on how the Investment Zone proposals could apply to Northern Ireland, particularly in town and city centres that have high levels of dereliction and are in need of further support.
“We are disappointed that no funding assistance from treasury has been allocated to allow a business rates holiday to be introduced locally.
“If we are to stand any chance of saving local high street businesses and protecting jobs, it is vital that a rates holiday is urgently introduced.
“Lowering VAT rates should also have been included in this statement, rather than focusing on stamp duty and corporation tax.”
The mini budget announced by the Chancellor has proved extremely controversial with many claiming it was a budget for the richest 5% of the population. It does not seem to have been particularly popular with the markets either as the pound plunged to its lowest ever level against the dollar today. We could be in for a rocky ride over the next few weeks and months.