Wednesday 13 December 2017

British tax cuts target our jobs

Corporation tax cut to 17pc, CGT to 20pc

David Cameron. Photo: PA
David Cameron. Photo: PA
Donal O'Donovan

Donal O'Donovan

Britain is targeting Ireland's ability to attract jobs by slashing its key business tax rates.

And the income tax regime for middle-income earners has also been made more attractive in Britain.

In Ireland, workers start paying the higher rate at just under €34,000, but in Britain, that threshold will now rise to €57,000.

The move hands an effective personal tax cut to 31 million workers in Britain - but also makes the country far more competitive when trying to attract foreign executives who bring jobs.

The developments will pile pressure on Irish efforts to retain and attract international investment.

Britain's headline rate of corporation tax will be cut to 17pc by 2020, closing the gap substantially on our low 12.5pc rate - once in a league of its own among developed nations.

The budget tax sweeteners may help shore up support for Prime Minister David Cameron ahead of a June referendum on European Union membership.

The other big change that will have implications for Ireland is cutting capital gains tax (CGT), which is paid when business owners sell assets, to 20pc from 28pc. That compares to a standard 33pc CGT rate here and poses a direct challenge to Ireland's attractiveness as a business base, according to business leaders here.

Meanwhile, talks on the formation of a government are progressing slowly. Fianna Fáil is trying to poach the Labour Party from Fine Gael in the hope of Micheál Martin beating Enda Kenny in the next Taoiseach vote.

Irish Independent

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