A director of Belfast-based professional services firm HNH Group has expressed concern at the "very real risk" that a corporation tax rate cut will not happen. Speaking to Insider, Richard Moorehead added it was "frustrating" to be so close to an agreement, but stressed that if it does go ahead it could be a "powerful catalyst for change in the Northern Ireland economy".
At the start of 2015 the government published The Corporation Tax (Northern Ireland) Bill, which provides for the devolution of tax powers to the assembly, should allow Northern Ireland to set its own rate of corporation tax from April 2017.
The current UK corporation tax rate is 20 per cent, while the Republic of Ireland companies pay 12.5 per cent. However, with no Stormont House agreement in place a tax cut by 2017 looks uncertain.
"The devolution of corporation tax has been at the forefront of most discussions over the last three to four years and now the inability of the NI Executive to reach an agreement is holding us back," Moorehead said.
When asked if there is any risk of a corporation tax cut agreement not being reached, Moorehead replied: "A very real risk, yes. Stormont House, on the face of it, was supposed to agree everything but various parties no longer agree.
"There needs to be some resolution. We will find a way through."
The argument for cutting the 20 per cent rate "has become too fixated on foreign direct investment (FDI)", added Moorehead. "It's important to stress it's not all about FDI," he said. "It's also about giving indigenous businesses more cash for investment in jobs and the like.
"Any increased levels of FDI would be the icing on the cake."
Moorehead said one of the challenges the country is facing is a lack of access to funding: "A cut in corporation tax will help this. The more you are able to fund yourself, the easier it will be.
"For me the big difference between Northern Ireland and the rest of the UK is that we do not have a private equity community on the ground. We do have a small number of capital funds providing early stage businesses with support and they do play a fundamental role.
"What we don't have is the funds that write cheques of £5m plus.
"If you look at other UK regions, you will find that networks of private equity investors are actively engaging on a daily basis with companies and building an awareness of private equity as an option.
"Over here, it's often viewed with a degree of scepticism or wariness because we don't have that presence on the ground."
Moorehead added that it is "incumbent upon the advisory community" to spread awareness and dispel the negative myths surrounding private equity.
