Draft Guidance on Northern Ireland Corporate Tax Regime

The HMRC has released a 120 pages draft guidance on the operation of Northern Ireland’s corporation tax regime and invites interested parties for comments. The guidance covers calculations of 'profits or losses', corporate tax rate of 12.5 percent, rules on intangible fixed assets, R&D relief, creative industries reliefs and a new “patent box” legislation.

Profits and Losses

Under the new Northern Ireland’s corporation tax regime, the Northern Ireland Assembly will have the power to set the Northern Ireland rate of Corporate tax in relation to ‘Northern Ireland profits or losses’ (as distinct from ‘mainstream profits or losses’). The guidance further describes the special rules which apply to Northern Ireland losses of various kinds and elaborates on how these profits and losses are calculated for large companies and SMEs.

Corporate Tax Rate

The Northern Ireland has committed to setting a corporate tax rate of 12.5 percent, the same as that of the Republic of Ireland. This would take effect in April 2018, assuming that the UK government is satisfied that Northern Ireland’s finances are on a ‘sustainable footing’.

The consultation on the draft will run until January 1, 2017.


The guidance is structured in eleven main parts:

  1. main rules and key concepts;
  2. calculating profits and losses for SMEs;
  3. calculating profits and losses for large companies;
  4. capital allowances and balancing charges;
  5. rules on intangible fixed assets;
  6. R&D relief;
  7. remediation of contaminated or derelict land;
  8. creative industries reliefs;
  9. “patent box” legislation; and
  10. adapted rules on partnerships.

Source: HMRC, Draft Guidance


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