Posted on Tuesday 21 October 2014 by Ulster Business

Clock ticking on corporation tax decision

Prime Minister David Cameron pictured second left with, from left, Deputy First Minister Martin McGuiness, First Minister Peter Robinson and Secretary of State Theresa Villiers

The Prime Minister has just over six weeks to decide whether or not to devolve the power to set corporation tax to Stormont.

David Cameron said last summer he would make a final decision on whether or not he’ll give a green light to the proposals no later than the Autumn Statement scheduled for 3 December 2014.

It’s thought a decision will emerge from Downing Street “in the next few weeks” and business organisations here are urging Mr Cameron to hand power to Stormont

That would allow the Executive to cut the rate of corporation tax here to at least 12.5% from the current rate of 21%, a move which would level the playing field for businesses in Northern Ireland in line with those in the Republic where the main business tax rate has been at 12.5% for some years.

It would also remove a key advantage the Republic holds when competing to win inward investment against Northern Ireland.

“Devolving corporation tax will create tens of thousands of vital private sector jobs in Northern Ireland over the next decades. Businesses of all sizes and from all sectors along with colleges and universities have worked long and hard for corporation tax varying powers to be granted to the Northern Ireland Assembly,” said Eamonn Donaghy, spokesperson for Grow NI, the umbrella group of a number of business organisations.

While momentum has been growing behind the ‘yes’ decision from Mr Cameron, there are concerns that the political impasse in Stormont surrounding welfare payments could delay a move.

Still, business is hoping a commitment to devolve more power to UK regions following the Scottish Referendum will bode well for the chances of success.

“His (Prime Minister’s) recent commitment to more devolution throughout the UK means that devolving corporation tax rate varying powers to Northern Ireland is the clear and obvious next step to take,” Mr Donaghy said.

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