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Thursday
May052011

Was tax cut pointless?

A leading academic has branded the Chancellor's recent corporation tax changes a waste of time. Professor Michael Moore is director of research at Queens University Management School. He was also a recent panel member at a debate on the Treasury's report on the measures taken to re-balance Northern Ireland's economy.

The report examines the merits or otherwise of the phased reduction of corporation tax during the next 5 years.  Other panelists were prominent members of the UK business sector. These included David Dobbin, group chief executive of United Dairy Farmers, Peter Bunting of the Irish Congress of Trade Unions, Eamonn Donaghy, KPMG tax partner and a member of the pro-cut Northern Ireland Economic Reform Group, and Stephen Kingon CBE, Invest NI chairman.

The debate focused on whether the advantages of attracting foreign investment are off-set by the corporation tax cuts, given that Northern Ireland receives a grant from UK government. The lowering of the corporation tax rate will see a £300 million reduction in the UK grant. One of the panelists Mr Eamonn Donaghy said that this was nothing to get "het up" about. Mr Donaghy is also quoted as saying "It would be disappointing if it didn't result in the creation of jobs and increased investment,".

Professor Moore was less charitable in his response to the corporation tax cuts rate cuts. In his response to Mr Donaghy he is quoted as saying: "Cutting corporation tax is a complete and utter waste of time in terms of attracting foreign direct investment and job creation."

Great Britain and Northern Ireland are still great places to do profitable business. The UK limited company still remains an effective tool with which you can operate that business. Its ease of set-up and use means effective business continuity and tax efficiency. You can both make and save money. For more information please go to http://stmworldwide.com/uk-limited-company    



 



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