Scottish Government
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Corporation tax

The Northern Ireland Affairs Committee yesterday said there was a "convincing case" for reducing corporation tax in Northern Ireland by devolving the tax to the Northern Ireland Executive.

Commenting on the Committee's report, First Minister Alex Salmond said:

"There has already been support from the Secretary of State for Northern Ireland and the all-party Scotland Bill Committee of the last Scottish Parliament noted that if Northern Ireland gets to decide on corporation tax, then so must Scotland.

"This is a further indication of the way the wind is blowing and a similar move for Scotland is inevitable. Rather than being dragged there over time, it would be far better for the UK Government to engage and respond positively now."

The House of Commons Northern Ireland Affairs Committee's report on Corporation Tax in Northern Ireland, published 24 May 2011, concludes that "there is a convincing case for reducing the corporation tax rate in Northern Ireland". It noted that, in order to reduce corporation tax in a way that meets EU rules, "the UK must devolve the decision to vary the corporation tax to the Northern Ireland Executive, and .. the Northern Ireland Executive must take responsibility for the financial consequences of the reduced tax rate."

The Committee said that "maximising Northern Ireland's competitiveness must be the goal of the Northern Ireland Executive and the UK Government" and called for "cooperation and agreement between the Northern Ireland Executive and HM Government" on the decision to devolve corporation tax and how it would be implemented.

The Scotland Bill Committee of the 2007-11 Scottish Parliament said: "The Committee's view is that if a scheme to vary corporation tax were to be available in some of the devolved countries of the UK as a tool of the UK Government's regional economic policy, it should be available as an option for a Scottish Government to use also."

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