The Northern Ireland business community has been reacting to Chancellor John Healey’s first budget, with a strong dose of relief that it doesn’t look to be as damaging as previous Rachel Reeves budgets.
Reactions are usually predictable, but at least one leading local accountant decided to shoot from the hip.
Ross Boyd, founder and director of Belfast-based chartered accountancy RBCA, said, “The Autumn Statement has once again confirmed that a Labour Government does not want to acknowledge what it takes to build a business, create jobs, and generate wealth. Last year, Reeves left very little wiggle room so there was no rabbit in a hat for Healy, but with the message coming from Government not one that inspires entrepreneurs to take risks, invest in themselves, and their communities, business owners may well decide by next year that it’s three strikes and Labour’s out. But worse, they’re out too.
“Owner-managed businesses are the backbone of this economy, yet the question now is not how they will grow their business, but whether it is worth carrying on at all. Will that be enough to send a chill down Labour’s spine this Halloween? If so, it needs to stop treating entrepreneurs like an easy target before it’s too late for them.
“Public services are essential, but it is private enterprise that generates the wealth needed to fund them. We need more owner-managed businesses, more people prepared to back themselves, and a tax environment that rewards entrepreneurial spirit rather than making it harder to get started.
“The new incentives for technology founders are benefits aimed at businesses turning over £10 million per year or more, as I believe from a first examination. How many businesses in Northern Ireland will that realistically benefit? Meanwhile, Labour is pushing HMRC’s increasingly aggressive approach to compliance – and it is becoming an expensive wild-goose chase. Pursuing every possible pound through additional bureaucracy does not mean the Government will collect more. And paired with the arrival Making Tax Digital, we’re entering into a period of intense administration for the business owner – the cumulative burden will become the final straw for some.
“Northern Ireland now more than ever needs to be realistic about the competition in Dublin, as Ireland’s 12.5 per cent corporation tax rate remains a key risk factor for our growth. We should be making it easier, not harder, for entrepreneurs and investors to do business here.
“My message to anyone sitting in a comfortable job with a great business idea is simple – think very carefully about staying where you are before making the leap into entrepreneurialism. It’s interesting that ultimately that is the message coming from a government that says it wants growth.”
Tina McKenzie, National Chair of the Federation of Small Businesses (FSB), agreed: “This Budget should have been the moment to help small businesses with the soaring costs holding them back, and the taxes restricting job creation. Instead, they got nothing to ease sky-high energy bills and nothing to make hiring someone more affordable.
“The Government has an ambition for growth in every postcode. Today’s Budget missed the mark on matching that ambition.”
The NI Chamber highlighted the most obvious issue for Northern Ireland. “Barnett consequentials arising from the Budget are welcome but they also serve as a timely reminder that Northern Ireland remains in an unsustainable position without an agreed Executive Budget,” said Chief Executive, Suzanne Wylie. “That absence undermines the certainty businesses need, constrains long-term planning and makes it harder to prioritise the skills, infrastructure and public-service transformation needed to unlock growth.
“NI Chamber has consistently supported a long-term, needs-based funding model for Northern Ireland. We have also backed responsible revenue raising measures where these form part of a credible package to fund efficient, effective public services and infrastructure. The Executive must play its part by agreeing a sustainable Budget, reforming how public money is spent and prioritising the growth enabling investment needed to deliver the globally competitive economy it aspires to in the Programme for Government.”
The Budget offers little of immediate assistance to businesses in Northern Ireland and represents a missed opportunity to unlock the region’s economic potential through targeted tax reforms and reduced labour mobility costs, was the view of Chartered Accountants Ireland.
“With the Chancellor using the Budget today to begin deepening devolution in England, 2028 presents a timely opportunity to reconsider Northern Ireland’s long-standing case for corporation tax devolution.
“The 1998 Good Friday Agreement and the 2023 Windsor Framework both show what can be achieved through partnership, ambition, joined-up thinking, and trust. In 2028 these both reach milestone anniversaries. Against the backdrop of the circumstances in which those agreements were reached, devolving the power to set a corporation tax rate appropriate for Northern Ireland should now be seriously considered.
“Crucial to unlocking the economic potential of Northern Ireland is a tax framework which reflects the region’s distinct economic and geographic circumstances; this would also help meet the Chancellor’s ambition of rebalancing regional differences across the UK by achieving growth in every postcode. The Government should start this process by commissioning an up-to-date economic assessment and costs versus benefits analysis of a lower rate of corporation tax for Northern Ireland,” said UK Tax Manager Leontia Doran.
Hospitality Ulster Chief Executive Colin Neill was quick to focus on his own sector. “Measures introduced specifically to support hospitality elsewhere in the UK, such as the increase of the threshold in small business rates relief and the freezing of rate increases to the rate of inflation for two years, should generate additional funding for Northern Ireland through the Barnett formula. It is essential that this money reaches our sector. Hospitality businesses here face significant financial pressures, and any funding arising from hospitality-specific support should be ringfenced to deliver direct benefits for local operators.
“We recognise that the increase in wages will help people facing the cost-of-living crisis, but there is also a cost of doing business crisis and therefore this cannot be done in isolation. The Government cannot continue to raise wages without addressing the excessive taxation of the hospitality industry which is now over 40%. Put simply, we cannot pay from an empty purse. Higher wage bills without lower taxation will result in less hours for staff and less employment in the industry as businesses struggle to balance the books.”
Chris McCracken, Managing Director of Belfast’s LQ Bid, pointed to the easing of business rates in England. “Any action to ease the burden of business rates in England reinforces the urgent need for an equivalent system in Northern Ireland. Our high street businesses are facing the same pressures from rising costs, changing consumer behaviour, and competition from online retailers, yet the current rates system continues to place a disproportionate burden on those investing in physical premises. Northern Ireland cannot afford to stand still while reform progresses elsewhere. We need meaningful, structural reform that delivers a substantial reduction in commercial rates and creates a fairer balance between bricks-and-mortar businesses and online commerce. Real Rates Reform offers a practical route forward, helping protect jobs, encourage investment. and put forward a future for our town and city centres. Our high streets have shown extraordinary resilience, but resilience isn’t enough. The Executive must act now to give businesses the confidence and support they need to thrive.”
Neil Armstrong, Tax Partner at accountants Baker Tilly Mooney Moore, said that, coupled with wage increases, small businesses in Northern Ireland will continue to feel the pressure of taxes that remain unchanged.
“The timing of these measures also matters. While the Government has set out its intention to support businesses and households, much of the impact will not be felt immediately. Businesses must manage costs and make investment decisions now, rather than wait for measures that may take months to come into effect.
“Ultimately, this Budget looks unlikely to deliver the step change in support many businesses need. While individual measures will benefit some households and firms, there is little to address the broader pressures facing employers, workers, and smaller businesses.”
Greg Boyd, Northern Ireland economist at PwC, commented on household impacts. “The UK Budget provides some immediate support for Northern Ireland households against a challenging economic backdrop. The fuel-duty freeze is particularly relevant given our high reliance on private vehicles. Energy support is less straightforward, as measures applying in Great Britain may not automatically extend to Northern Ireland.
“But many of the Chancellor’s spending announcements will not apply directly in Northern Ireland, where areas such as health and education are devolved. However, the Budget will give the Executive an additional £270 million through the Barnett formula. How that money is spent depends on Stormont agreeing a budget, but seven months into the financial year, it still hasn’t. This additional funding therefore arrives into an uncertain fiscal position.”