Northern Ireland's corporation tax to be cut to 12.5% in 2018

Northern Ireland's corporation tax to be cut to 12.5% in 2018

Northern Ireland will see a cut in the rate of corporation tax (CT) to 12.5% in 2018, down from the current rate of 20% in the UK.

The new rate is being introduced a year later than was originally planned after a stalemate between the British government and Northern Ireland executive.


As of April 2018, Northern Ireland's rate of CT will be the same as its neighbour the Republic of Ireland, and the move is widely expected to have a significant effect on business investment.

The new move comes after ten weeks of intensive dialogue between the parties at the Northern Ireland executive based at Stormont House. The new agreement between the UK and Irish governments has been set out in a publication called ‘A Fresh Start: the Stormont Agreement and Implementation Plan.’

Under the new plan, the UK government will give financial support worth around £500m to help

Stormont in "tackling issues unique to Northern Ireland including support for their programme to remove peace walls."

Essentially, the package will bring forward the complete devolution of CT powers to the Northern Ireland executive.

The plan states: "The UK government will undertake an ex-post review of the costs of the devolution of CT four years after the implementation of a devolved rate by the executive. This review will consider the extent of behavioural costs (but not second round effects) and will make further adjustments to the Northern Ireland block grant as supported by new evidence."

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