What Do Northern Ireland businesses want in the Spring Statement?

With Chancellor Rachel Reeves set to deliver the Spring Statement tomorrow (26^th March), business owners across Northern Ireland (NI) will be watching closely. The October 2024 Autumn Budget brought significant changes—some beneficial, others burdensome—particularly for small and medium businesses trying to navigate an already challenging economic landscape.

As we reflect on how businesses have coped, there’s also an opportunity to push for fresh, forward-thinking policies. What should be on the wish list? Let’s explore what we need—and what we dare to dream for—in the upcoming Spring Statement and beyond.

Red Tape: Key challenges the October 2024 Budget had on NI businesses

1.Higher employer costs

The increase in Employer National Insurance Contributions (NICs) from 13.8% to 15% and the reduced threshold from £9,100 to £5,000 have placed financial pressure on employers, forcing some SMEs to reconsider expansion plans—or even cut jobs to stay afloat.

2.Capital gains and Inheritance tax changes

The rise in CGT rates (from 10% to 18% for basic rate taxpayers and 20% to 24% for higher rate taxpayers) has made succession planning more expensive. Meanwhile, the £1 million cap on business and agricultural property reliefs could lead to forced sales of family-run businesses.

3.End of Non-Domiciled tax status

The scrapping of the non-domiciled tax regime aims to bring in more revenue but could make Northern Ireland less attractive to foreign investors and highly skilled expatriates.

4.Increased public funding – But will it benefit businesses?

The additional £1.5 billion allocated to the Northern Ireland Executive is welcome, but business leaders are still waiting to see whether any of this will translate into direct support for the private sector.

Rocket Fuel: An NI’s Business Wishlist for the Spring Budget

Northern Ireland’s business community is resilient, innovative, and fiercely independent—but let’s face it, the tax system isn’t exactly built for speed. With economic uncertainty still lingering, we need bold moves, not just cautious tweaks. So, if chancellor Rachel Reeves really wants to ignite growth, investment, and entrepreneurial spirit, here’s a wish list that might sound ambitious—but isn’t that the point?

1. Tax breaks for innovation and sustainability

Many NI businesses are at the forefront of renewable energy, AI, and agri-tech, but investing in the future comes with high upfront costs.

Wish list idea: “Innovator’s tax credit”—a turbo-charged version of R&D tax relief for AI, automation, green energy, and export-driven tech. This would help SMEs compete globally and drive the economy forward.

2. The tax-free hiring incentive

Hiring should be a sign of success, not a financial risk. The NICs hike has made expansion tougher for small businesses.

Wish list idea: A two-year NICs “growth exemption”—where SMEs creating new full-time jobs pay zero employer NICs on those roles for the first 24 months.

3. A “Brexit Buffer” for Northern Ireland’s unique position

Post-Brexit trade rules remain a headache for businesses trading with both Great Britain and the EU.

Wish list idea: A special tax status for NI businesses, with simplified VAT rules and tariff exemptions for SMEs trading cross-border.

4. A Digital Tax System that’s actually user-friendly

HMRC’s digital systems are clunky and time-consuming, making tax compliance a nightmare.

Wish list idea: A “Business tax dashboard”, where firms can see all obligations in one place, get automated updates, and even receive AI-driven insights on how to reduce liabilities.

5. Business Rates Reform: If not relief, then at least fairness

Unlike England, NI does not have sector-specific business rates relief, meaning high-street retailers and the hospitality sector continues to struggle.

Wish list idea: A “fair tax” model, where small brick-and-mortar businesses get an automatic rate cut if their revenues drop below a certain threshold.

6. The “tax-free first million” for startups

Startups face immediate tax pressures before they even turn a profit.

Wish list idea: The “tax-free first million” initiative—where new businesses pay zero corporation tax on their first £1 million in turnover during their first three years.

7. A “work anywhere” tax break to attract global talent

With remote work becoming the norm, NI could attract global professionals and investors.

Wish list idea: A “work anywhere” tax incentive—reduced income tax for remote workers who relocate to Northern Ireland, boosting the local economy.

What’s next?

The Spring Statement could be an opportunity to break free from short-term fixes and set the stage for long-term success. Will we see bold, business-friendly policies that fuel growth? Or just more tax tweaks that keep small businesses in survival mode?

Let’s stop playing it safe and start betting on Northern Ireland’s potential.

If you have any queries about this article, please do not hesitate to get in contact with Malachy McLernon, or your usual AAB contact.