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| £100m rise in estimated cost of corporation tax for NI | £100m rise in estimated cost of corporation tax for NI |
| (about 3 hours later) | |
| The estimated annual cost of devolving corporation tax to Northern Ireland has increased by more than £100m according to new Treasury figures. | The estimated annual cost of devolving corporation tax to Northern Ireland has increased by more than £100m according to new Treasury figures. |
| If Stormont gains the power to lower corporation tax, it must compensate the UK government by a corresponding cut in the amount of money it receives each year for spending. | If Stormont gains the power to lower corporation tax, it must compensate the UK government by a corresponding cut in the amount of money it receives each year for spending. |
| A previous Treasury estimate put that at around £300m. | A previous Treasury estimate put that at around £300m. |
| It is understood it has now presented a revised figure of about £400m. | It is understood it has now presented a revised figure of about £400m. |
| The reason for the increase is that the latest figure includes estimates for the profits earned by large UK companies - such as Tesco - who operate in Northern Ireland but declare their profits in Great Britain. | The reason for the increase is that the latest figure includes estimates for the profits earned by large UK companies - such as Tesco - who operate in Northern Ireland but declare their profits in Great Britain. |
| Factoring in these so-called branch profits has increased the potential cost of devolution by a third. | Factoring in these so-called branch profits has increased the potential cost of devolution by a third. |
| Ministers and officials at Stormont are seeking further information from the Treasury over how the figure was worked out and believe other mitigating factors could bring the final figure down. | Ministers and officials at Stormont are seeking further information from the Treasury over how the figure was worked out and believe other mitigating factors could bring the final figure down. |
| The Treasury consultation on rebalancing the Northern Ireland economy, which included discussion of the devolution of the powers to set corporation tax closed on 8 July. | The Treasury consultation on rebalancing the Northern Ireland economy, which included discussion of the devolution of the powers to set corporation tax closed on 8 July. |
| More than 700 responses have been received. | More than 700 responses have been received. |
| Low rates of corporation tax are considered an important means of attracting overseas investment. | Low rates of corporation tax are considered an important means of attracting overseas investment. |
| The overall UK rate is 26% and will fall by 5% over the next four years, but will still be much higher than the 12.5% rate in the Irish Republic. | |
| The consultation paper stated that any fall in corporation tax, if agreed by the Treasury, would have to be paid for by a corresponding drop in the block grant which could be up to £300m a year. | The consultation paper stated that any fall in corporation tax, if agreed by the Treasury, would have to be paid for by a corresponding drop in the block grant which could be up to £300m a year. |
| Both the first and deputy first ministers have said they want Northern Ireland to be able to set its own corporation tax rates in the future. | Both the first and deputy first ministers have said they want Northern Ireland to be able to set its own corporation tax rates in the future. |