Northern Ireland’s Chartered Accountants said that Chancellor Alistair Darling’s Budget was more about political statements than economic announcements, but that there was some support for small businesses which could have a positive effect for local firms.
Kevin Kingston, Chairman of Chartered Accountants Ulster Society, a district society of Chartered Accountants Ireland said: "Perhaps the best news of this year’s budget for local business is that the rate of Corporation Tax for small companies has not increased from 21%, as most local companies would fit into this category. A rate rise had been rumoured previously but we’re glad to see the rate maintained. At a very difficult time for small businesses we need to keep their costs down.
"We would also welcome the £2.5 billion package to boost skills and innovation amongst small businesses and the increase to the threshold of the Annual Investment Allowance to £100,000, meaning that business can get more immediate tax relief on investing in plant and machinery.
“Our priority must be to sustain and develop the best of what we have in our local economy. To achieve that, we must find a blend of public sector strategic thinking and decisive private sector commerciality. It is vital that our political leaders and business sector work together to build for economic recovery.”
The Chairman of the Chartered Accountants Ireland Northern Ireland Tax Committee, Mr Eamonn Donaghy, said: "The Capital Gains Tax rate has helpfully remained at 18%, and this, coupled with a doubling of relief on Capital Gains Tax for entrepreneurs so that the first £2m of gains from sales of business assets and shares will be taxed at only 10%, should help to encourage business and share disposals.
"The big headline is the scrapping of stamp duty land tax for homes below £250,000 for first time buyers. It’s a step which may encourage many first time buyers to get onto the property ladder and should have a positive impact on activity in the Northern Ireland housing market.
"While there is some good news for Northern Ireland here, we would like to see more being done to stimulate the business sector. In order to encourage multinational inward investment we recommend the introduction of a new Technology Zone in Northern Ireland which would confer tax benefits such as a 12.5% rate of corporation tax and a special regime of capital allowances for companies operating within that zone.
“In addition, to encourage more R&D in Northern Ireland a Northern Ireland specific R&D tax relief should be implemented. We propose an increase in the tax credit available to 200% of expenditure on R&D, coupled with a relaxation on the rules governing what constitutes R&D expenditure.”