John Swiney’s putting up a fight for Scotland to have whatever Northern Ireland bags in terms of its own corporation tax rates. Now it remains to be seen what that is.
In fact the Treasury was keen to point out that its new consultation paper “does not make recommendations”. Rather it lays out some of the problems and political conflicts that are likely to arise from varying a business tax within on jurisdiction. If answers cannot be found to those (mostly issues of cost and risk) then it may come at a price that does not suit the incoming executive.
I was interested in the fact that whilst the Edinburgh Chamber of Commerce was in favour, the Scottish CBI is not, and indeed:
Accountant Richard Murphy, director of Tax Research UK, said the cross-border differential would create “lots of documentation, hassle and inconvenience” that could stifle business.
With an economy weaker than Scotlands, and a long land border with the Republic it probably does make more sense for Northern Ireland than Scotland. But tax harmonisation with the Republic will likely be subject to some form of tethering to the wider UK tax rate.
In other words, if the hurdles are jumped on this legislation, it may be some time before 28% becomes 23%, becomes 12.5%.