TaxPersonal TaxTreasury defends Ulster U-turn

Treasury defends Ulster U-turn

The government has pleaded that it did its best to secure tax breaks for Northern Ireland despite Accountancy Age revealing last week that ministers had been being forced by Europe into an embarrassing U-turn on capital allowances.

Responding to the severe criticism which followed its withdrawal of 100% first-year capital allowances for many businesses in the province a fortnight ago, the Treasury said: ‘We are satisfied we have secured the best possible deal for small and medium-sized enterprises in Northern Ireland.’

Inland Revenue staff in Northern Ireland are said to be aghast at the shock withdrawal of the allowances aimed at all SMEs, which were announced last May in the lead-up to the Good Friday agreement referendum. But the government was forced to withdraw them for large swathes of the province’s businesses – mainly freight and agriculture – as they were deemed illegal state aid under European Commission rules.

Responding to criticism from angry business representatives in the province last week, the Treasury added: ‘It is an exaggeration to say the measure has been severely restricted. While some sectors of industry will not now be eligible for the measure, they are still entitled to 40% first-year allowances.’

But the Treasury emphasised that it had said that the measure would have to be approved by the EC when it was announced.

See analysis Europe thwarts Northern Ireland tax spin

Related Articles

Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

3w Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

2m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

4m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

5m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

6m Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

8m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

9m Alia Shoaib, Reporter