North may cut Corporation Tax - Impact?

gleep

After reading BBC news today, i thought this might deserve a new thread, having previously mentioned the possibility here; (Mods please move / delete if not!)

http://www.boards.ie/vbulletin/showthread.php?t=2056084141&page=3
yesterday.

It seems a serious possibility and threat to whats left of our economy.

If the North does cut it's CT rate (10% rate being mooted), I think it will have a devestating impact on the South. With salaries being (conservativley) 50% lower, property the same, along with lower costs all-round, if I was the CEO of a Multi-national I'd be up the road to Belfast in a heartbeat.

I wonder are our Dept. of Finance taking any notice of this story at all. Probably not, they'll blame their advisors when the jobs start flowing north.

ardmacha

With salaries being (conservativley) 50% lower

This is a misuse ( misspelling) of conservatively. The way you have written it there is no doubt whatsoever that salaries are 50% lower and probably more. This is not true. Show evidence of a substantial group of people who earn less than 50% in NI and who are of interest to multinationals.

Existing multinationals are not going to go anywhere in a hurry. New ones might well weight such a change into their decision. But I'll believe it when I see it, the rules for this will be quite restrictive to stop British companies all setting up brass plate operations in Belfast.

gleep

ardmacha wrote: »

This is a misuse ( misspelling) of conservatively. The way you have written it there is no doubt whatsoever that salaries are 50% lower and probably more. This is not true. Show evidence of a substantial group of people who earn less than 50% in NI and who are of interest to multinationals.

Existing multinationals are not going to go anywhere in a hurry. New ones might well weight such a change into their decision. But I'll believe it when I see it, the rules for this will be quite restrictive to stop British companies all setting up brass plate operations in Belfast.

Sorry about the spelling, and.........

Me and SEVEN people I know working in Dublin (mostly in Financial services),most are accountants, and all of them at least doubled their salaries when they moved south. BTW, I trebled mine, as did a few others. We all work for MN's.

A fully qualified, degree educated, chartered accountant working in the North can expect to earn between £27 - £30k. What would they earn here???

As e.i has said on the other thread, Jersey, Isle of Man and other outposts of the UK are currently Tax havens, nothing to stop the North doing the same.

I believe this is evidnce enough of people who earn 50% less in the North who would be of interest to multinationals, especially in financial services.

gonedrinking

I know accountants earn about 50% less in the north than the south. We outsource a lot of work to companies in the north because they do work for a fraction of the cost than southern firms charge. Ah beat me to it gleep.

gonedrinking

Although I don't think NI will be allowed to change their corp tax rate, the Brits already rejected the idea about a year ago, I don't see whats changed?

Inquitus

Reading that article, and bearing in mind the cuts being enforced in the UK at the moment, it seems incredibly unlikely the North would even be able to cut it's Corp Tax for the foreseeable.

gleep

gonedrinking wrote: »

Although I don't think NI will be allowed to change their corp tax rate, the Brits already rejected the idea about a year ago, I don't see whats changed?

The government

sarumite

Having worked for 7 years in SW England from 2001-2008, the salaries there were far far lower than what my mates back home were earning. I wouldn't put a figure on it like 50%, but I will say that the average salary in England (and the UK in general) were significantly lower than here, even with any increase in cost of living taken into account.

WalterMitty

I heard about a few american companies opening there in past few weeks. one in newry, one in derry.

Scofflaw

ardmacha wrote: »

This is a misuse ( misspelling) of conservatively. The way you have written it there is no doubt whatsoever that salaries are 50% lower and probably more. This is not true. Show evidence of a substantial group of people who earn less than 50% in NI and who are of interest to multinationals.

Existing multinationals are not going to go anywhere in a hurry. New ones might well weight such a change into their decision. But I'll believe it when I see it, the rules for this will be quite restrictive to stop British companies all setting up brass plate operations in Belfast.

Have to agree with that - allowing the North to pull in companies from the rest of the UK would be deeply unpopular.

cordially,
Scofflaw

mrgaa1

There is a local election in the early part of next year and I saw Arlene Foster on TV this morning and it seems UNLIKELY they will do this in the near future.

nordydan

This idea of a local rate of corporation tax is unworkable, and the British government know it. I'd say the idea is bandied about from time to time in an effort to get people thinking more about private industry and reducing NI's bloated public sector

gleep

Isle of Man tax rates are lower.......

http://www.gov.im/treasury/incometax/technical/companies.xml

Jersey has a rate of between 0 - 10%

http://www.lowtax.net/lowtax/html/jjedctx.html

Don't see the difference between them and the North.

This may not happen soon, but I believe it will happen. The grant given to the North is approx £8bn per year, the tax take is a fraction of that, it makes sense for the Tories to remove the grant and allow Stormount to fend for itself, with any surplus going into UK Treasury coffers.

ei.sdraob

It will knock the legs from underneath the Irish economy, removing our last unique selling point left

oh my, things are looking bleaker by the day. Now all we need is for corpo taxes to rise here in South and it be a proper tragedy (for us)

Amhran Nua

Eh the North isn't going to cut corporation tax, so the title of the thread is a bit misleading.

gleep

Fixed title, and what makes you so sure? Please don't say "because the rest of theUK would loose out", I've already given examples (Jersey & Isle of Man) of British juristictions with low CT rates.

Scofflaw

gleep wrote: »

Fixed title, and what makes you so sure? Please don't say "because the rest of theUK would loose out", I've already given examples (Jersey & Isle of Man) of British juristictions with low CT rates.

Neither Jersey nor the Isle of Man are actually part of the UK, though, nor part of the EU. They're both Crown Dependencies.

cordially,
Scofflaw

gleep

Scofflaw wrote: »

Neither Jersey nor the Isle of Man are actually part of the UK, though, nor part of the EU. They're both Crown Dependencies.

cordially,
Scofflaw

Yes, but the argument being put forward is that UK companies will set up shell companies to filter profits through the North if CT rates were changed. Also, companies who do pay the full rate of CT will be angry.

Well, there is nothing stopping UK companies setting up the same filter companies in IOM & Jersey at present, no-one has a problem with it now. And companies who pay full CT are not giving off about IOM & Jersey having low CT rates.

Amhran Nua

gleep wrote: »

Well, there is nothing stopping UK companies setting up the same filter companies in IOM & Jersey at present, no-one has a problem with it now. And companies who pay full CT are not giving off about IOM & Jersey having low CT rates.

Wouldn't it be simpler just to join the RoI?

/runs

gleep

Amhran Nua wrote: »

Wouldn't it be simpler just to join the RoI?

/runs

Agreed


/follows Amhran Nua

gurramok

The perception of political instability I suspect might be a factor for some companies who are not familiar with the modern peace process to not set up in NI. Every bombing no matter how small that gets news headlines might be off putting to the uninformed CEO who thinks there is still major trouble going on.

Of course, if we go down the road of social chaos the tables will be turned