Northern Ireland get’s record investment – without a cut in the tax rate

Posted on July 25 2013

As the Belfast Telegraph has reported:

The number of foreign inward investment projects into Northern Ireland has leapt by 41% in the last year.

UK Trade and Investment (UKTI) said that compares to an 11% increase in the number of foreign investments in the UK as a whole over the last 12 months, bringing 60,000 new jobs and safeguarding another 110,000 posts.

And that's happened without a cut in the corporation tax rate in Norther Ireland, which shows it is just not that important.

Can I now presume that this debate on making Northern Ireland a tax haven is over? I suspect not. The people who want to devastate its economy for personal gain are a little too persistent to believe that evidence will change their minds.

 

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8 Responses

  1. Someone says:
    July 25 2013 at 5:20 pm

    OT.

    Richard,

    A friend was telling me that…”foreign embassies owe more than £68 million pounds in parking fines, the USA owing £7.2 million alone”

    Could you confirm if this is the case ?.

  2. JamesS says:
    July 25 2013 at 11:01 pm

    Yup, it’s likely that the increased investment is nothing to do with tax and everything to do with lower relative wages in NI compared to the rest of the UK.

  3. Someone says:
    July 26 2013 at 12:10 am

    I don’t know what to say on this one…The word “Insanity” springs to mind…

    http://yalejournal.org/2013/06/12/who-authorized-preparations-for-war-with-china/

  4. Stephen Griffiths says:
    July 26 2013 at 9:12 am

    Doesn’t N Ireland get other kinds of Government subsidies?

    • Richard Murphy says:
      July 26 2013 at 9:14 am

      Yes

    • Andrew says:
      July 26 2013 at 10:56 am

      Stephen

      “Invest NI”, which is government funded, has access to grants worth in excess of £100m.

      Their website offers those seeking to inwardly invest into NI the following:

      “tailor-made support packages include cash grants for capital investments, employment, interest relief plus support for a variety of business operations such as research and development (R&D), training and marketing…

      -revenue grants towards start-up costs, interest relief, factory rental costs, training costs, marketing development costs and R&D expenditure
      -pre-employment training grants
      -finance investment in the share capital of a company and the provision of government loans at commercial and concessionary rates
      -property tax exemptions for manufacturing property”

      So, no cut in the rate of CT but plenty of government subsidies in other ways, including property tax exemptions.

      So it would seem a little simplistic to suggest that financial incentives (whether tax breaks or government subsidies in other ways) are “just not that important” in getting companies to relocate to NI.

      Whether HMG cuts your tax bill by £10,000 or gives you a grant of £10,000 the cost to HMG and benefit to you are exactly the same.