TaxCorporate Tax#AS2014: Wales and NI handed devolved tax powers

#AS2014: Wales and NI handed devolved tax powers

Wales will see full devolution of business rate raising powers, while NI looks set to gain control over its corporation tax rates - with a caveat

#AS2014: Wales and NI handed devolved tax powers

THE chancellor’s Autumn Statement got the much touted tax devolution issue off to a somewhat genteel start, with the Celtic countries gaining most traction.

Wales will now see the full devolution of its business rate raising powers, while Northern Ireland looks set to gain control over its corporation tax rates – but only if the NI Executive is deemed to be able to manage the financial implications of such a move.

Kevin Hindley, managing director at Alvarez & Marsal Taxand UK, said the NI move “will be widely welcomed by the local community which sees up close stiff competition for inward investment from the Republic. For too long Dublin has captured an increasingly large slice of the inward investment pie and this will go some way to redressing that skewed balance.”

But he stressed that NI must be able to afford to lower the rate to compete with the Republic, a situation likely to be implemented through a series of staggered reductions over a number of years.

For Scotland, the chancellor simply reiterated the devolved tax-raising powers that the country gained following the deeply divisive referendum.

Richard Threlfall, UK head of infrastructure, building and construction at KPMG, blasted the statement from an English regions perspective: “City leaders across the country will be drowning their sorrows tonight after the chancellor offered warm words but nothing of substance on devolution.

“It is deeply disappointing that the Government has failed to bring forward any proposals for fiscal devolution to England’s major city regions, as many had hoped.

“Compared to other countries, the buying power in the hands of UK local government is almost pointlessly small. “Without a greater degree of control over local taxes all talk of devolution, investing in our city regions, and rebalancing the UK economy is just hot air.”

 

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