The Corporation Tax (Northern Ireland) Act 2015 allows the Northern Ireland Assembly to set a rate of corporation tax (applicable to certain trading profits) separate to that of the UK. The Northern Ireland Executive has committed to setting a rate of 12.5% in April 2018. Draft guidance for the Northern Ireland Corporation Tax regime was published on 26 September 2016 and comments are invited before 1 January 2017.
Following the publication of the draft guidance, the Government announced that it will be amending the Northern Ireland Corporation Tax regime in the 2017 Finance Bill. Changes include extending the regime to allow more SMEs trading in Northern Ireland to benefit as well as providing measures aimed at preventing abuse of the regime, although the exact proposals are not yet known.
These measures will affect limited companies and certain partnerships with at least one corporate partner, where the relevant company or partnership’s employee time and costs are attributable to Northern Ireland.