Budget Resolution 22. Application of Northern Ireland Rate for Corporation Tax — Smaller Enterprises — 6 Sep 2017 at 18:44

The majority of MPs voted to allow smaller enterprises with a presence in the UK outside Northern Ireland to have the share of their profits which relate to their Northern Ireland operations taxed at the Northern Ireland rate. Previously the law only offered such an option to larger companies.

The motion supported by the majority of MPs taking part in this vote was:

• That provision may be made—
• (a) about the extent to which trading profits are chargeable to corporation tax at the Northern Ireland rate,
• (b) amending the Capital Allowances Act 2001 in connection with Part 8B of CTA 2010 (trading profits taxable at the Northern Ireland rate), and
• (c) to reflect changes to the Northern Ireland departments and the creation of new Ministerial offices.

The Corporation Tax (Northern Ireland) Act 2015 introduced Part 8B of the Corporation Tax Act 2010 which provided for a Northern Ireland Rate for Corporation Tax.

The motion which was the subject of this vote appears to relate to Clause 25 and Schedule 7 of the Finance Act 2017-19 Bill titled "Trading profits taxable at the Northern Ireland rate" which seek to amend the law relating to the application Northern Ireland rate of corporation tax. [1]

The amendments provide an option for a micro, small or medium sized enterprise which does not have at least 75% of its UK employment time and costs in Northern Ireland, but has a "Northern Ireland Regional Establishment", to elect to use rules which already applied to large companies, enabling them to attribute profits and losses to their Northern Ireland, to which the Northern Ireland Corporation Tax rate applies.

A provision is included disqualifying companies which have a "Northern Ireland Regional Establishment" for tax avoidance purposes from having the Northern Ireland Corporation Tax rate applied to their profits.

The amendment referred to in part (b) of the motion is consequential to the corporation tax changes. The reference in part (c) of the motion on changes to Northern Ireland departments and ministerial offices appear to relate, for example, to paragraph 26 of Schedule 7 which refers to a substitution of “Minister of Finance” for “Minister of Finance and Personnel”.^[1]

See also:

• Explanatory notes to the Corporation Tax (Northern Ireland) Act 2015
• "Northern Ireland rate of Corporation Tax: changes to small and medium-sized enterprise regime", HMRC Policy Paper, 5 December 2016

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• [1] Explanatory notes to the Finance Bill 2019-19

Debate in Parliament |