Budget 2016

How does the Budget affect Northern Ireland businesses?

The Chancellor, George Osborne, announced his Budget Statement on Wednesday 16 March 2016. We have summarised the key points from the Budget and highlighted issues affecting Northern Ireland businesses.


Growth forecast for the next few years:

  • 2.0% in 2016
  • 2.2% in 2017
  • 2.1% in 2018
  • 2.1% in 2019
  • 2.1% in 2020


Employment grew by 15,000 in Northern Ireland in 2015.

Government borrowing and debt

Borrowing set to fall and is due to be less than forecast at the previous Budget announcement:

  • £72.2 billion in 2015-16
  • £55.5 billion in 2016-17
  • £38.8 billion in 2017-18
  • £21.4 billion in 2018-19
  • £10.4 billion surplus in 2019-20

Debt forecast:

  • 82.6% in 2016-17
  • 81.3% in 2017-18
  • 79.9% in 2018-19
  • 77.2% in 2019-20
  • 74.7% in 2020-21

Northern Ireland specific announcements

The devolved administrations’ budgets will be adjusted in line with the Barnett formula and the Northern Ireland Executive will see an increase in its budget. There will be an extension of Enhanced Capital Allowances to the enterprise zone in Coleraine. The first Air Ambulance service for Northern Ireland will also be established from a £4.5 million allocation from banking fines.

Corporation Tax

Corporation Tax rate is to fall to 17% from April 2020. Northern Ireland is set to introduce a Corporation tax rate of 12.5% in 2018.

Tax avoidance and evasion

The government aims to raise £12 billion from tackling tax avoidance and evasion. The government aims to tackle VAT evasion by overseas sellers by taking action that will help to protect consumers and level the playing field for businesses. HM Revenue & Customs will be able to require non-compliant overseas traders to appoint a tax representative in the UK, and will be able to inform online marketplaces of the traders who have not complied. If traders continue to evade VAT and no action is taken to prevent the fraud, then online marketplaces can be made liable for the VAT.

Business rates

A number of changes for business rates were announced but these do not apply to Northern Ireland.

Insurance Premium Tax

To be raised by 0.5% to a standard rate of 10%.

Income tax

The personal allowance will rise to:

  • £11,000 from April 2016
  • £11,500 from April 2017

The higher-rate threshold will rise to £43,000 in April 2016 and £45,000 from April 2017.

Self employed taxes

Class 2 National Insurance contributions to be scrapped for self-employed workers from April 2018. Currently, self-employed people have to pay Class 2 NICs at £2.80 per week if they make a profit of £5,965 or over per year. They also pay Class 4 NICs if their profits are over £8,060 per year. From April 2018, they will only need to pay one type of National Insurance on their profits, Class 4 NICs.

Capital Gains Tax

For commercial properties the higher rate of Capital Gains Tax will be cut from 28% to 20% and the basic rate from 18% to 10%. This will take effect from April 2016.

Stamp duty

New rates and tax bands for commercial stamp duty will be introduced from 17 March 2016:

  • 0% for the portion of the transaction value up to £150,000
  • 2% between £150,001 and £250,000
  • 5% above £250,000


  • Beer duty will be frozen
  • Tobacco duty will rise by 2% and hand rolling tobacco will rise by an additional 3% from 6pm on 16 March 2016
  • Cider duty will be frozen
  • Spirits duty will be frozen
  • Wine duty rise as planned
  • Fuel duty will be frozen

Alcohol duties.


The ISA limit will be raised to £20,000 from April 2017. A Lifetime ISA will be introduced from April 2017 for adults under the age of 40. Up to £4,000 can be saved each year. The government will boost the savings in a lifetime ISA by 25% so for every £4 saved in a year the government will top up with £1.

Levy on sugary soft drinks

Soft drinks companies will have to pay a sugar levy from April 2018 on soft drinks with added sugar. There will be two bands: one for total sugar content above 5 grams per 100 millilitres and a higher band for drinks with more than 8 grams per 100 millilitres. It is forecast that this levy will raise £520 million and Northern Ireland will receive its share through the Barnett formula.

What is the Budget?

Source: nibusinessinfo.co.uk