Tax and Talent


Alastair Hamilton, Chief Executive
Invest NI
Feb 02, 2015

The opinion piece below is by our CEO Alastair Hamilton and examines corporation tax. It appeared in the News Letter on 13 January 2015.

The recent publication of the Bill to enable the devolution of Corporation Tax in Northern Ireland from April 2017, has been warmly welcomed by political and business leaders alike as an important milestone in our economic history. It has been a long road to get to this point and it has only been possible thanks to the perseverance and persuasive arguments made by many in our business community over a period of years.

Adds to the attractiveness of NI as an investment location

The ability to set a reduced rate of Corporation Tax would significantly add to the attractiveness of Northern Ireland as an investment location for existing and potential new investors and bring benefits to our local business base.

Of course, we continue to have levers to support economic development that are not dependent on a lower rate of corporation tax, such as our talent pool and support for R&D, and which contribute to our overall proposition of a skilled workforce, a competitive cost base, government support, and proximity to markets or customers.

The recent success which we have enjoyed indicates that our current strategy is the correct one, and that we should continue to focus on software, ICT, Financial Services and Business & Professional Services.

However, the potential to reduce the Corporation Tax rate will both complement and enhance this proposition to a combination of tax and talent in a value for money environment, which could make us the most attractive investment location in Western Europe, based on a low corporate tax rate and strong value proposition.

Potential investment from new sectors

A reduction in corporation tax would also open the door for us to win investment from new sectors which tend to have high levels of R&D intensity, salaries, productivity and export orientation, such as Life Sciences.

Our competitive positioning for cost sensitive manufacturing projects could also be enhanced. A particular attraction of this is that such projects have less of a requirement to locate in our major cities, giving the opportunity for the benefits of reduced corporation tax on a sub-regional basis.

We have around 80 university groups in Northern Ireland undertaking research, a number of which are “world leading” and all operate in high value sectors. A reduced rate of corporate tax would help attract further linkages between business and universities to drive higher levels of research.

There will also be significant and immediate benefits to our local business base, the vast majority of which are SME’s. The ability to retain more of their profit would release additional capital for businesses to invest in their future growth, create employment and provide an immediate impetus to grow the private sector in NI. This is particularly timely given the recent regulatory changes in EU State Aids and the more general pressures on public sector funding will inevitably mean that companies will have to become less reliant of grant funding.

However, we know that the hard work to capitalise on this very positive development for the Northern Ireland economy is only beginning. As Minister Foster said last week, when welcoming the publication of the Bill, we need to ensure that we have the right offering in areas such as skills and infrastructure that a growing private sector needs.

We have already begun to ensure that our sales proposition is tailored for a low corporation tax environment and this work will now accelerate.

Share this Article


No comments yet.

Have Your Say


Latest Features

How can you plan for the unknown?
Olive Hill, Executive Director of Strategy
Feb 22, 2018
Q&A with Mark Johnston Senior Vice President West Coast of America
Mark Johnston, Senior Vice President West Coast of America
Feb 21, 2018
How new technology is changing the way customers shop
Nick Martin, e-Business Advisor
Feb 16, 2018
Firms start 2018 on a positive footing
David Roberts, Invest NI Economist
Feb 15, 2018
Opportunities await in the land Down Under
Peter Hendrikssen Regional Manager, Australia & New Zealand
Feb 14, 2018
Giving companies a head start with our Business Information Centre
Mandy Mills, Business Information Centre Manager
Feb 13, 2018

Sign up for News

 Enter Code