Corporation Tax Exemption for Northern Ireland Housing Director

Who is likely to be affected

The measure only concerns the Northern Ireland Housing Executive.

General description of the measure

The measure provides a corporation tax exemption for the Northern Ireland Housing Executive, the body in Northern Ireland that provides state-funded housing.

Political objective

The measure aims to ensure consistency in the tax treatment of the provision of state-funded accommodation across the UK.

Currently, equivalent state-funded accommodation providers in England, Wales and Scotland are exempt from corporation tax (as they are local authorities for corporation tax purposes). The Northern Ireland Housing Executive is not.

The measure will be totally exempt, with retroactive effect from April 1, 2020.

Context of the measure

The Northern Ireland Housing Executive was set up in such a way that it did not meet the definition of ‘local authority’ for corporation tax purposes and has been paying corporation tax for a number of years .

Detailed proposal

Effective date

The measure will have retroactive effect from April 1, 2020.

Current law

The Corporations Tax Act 2009, Part 2, Chapter 1, Section 2, requires corporation tax to be levied on the profits of ‘corporations’.

The Corporation Tax Act 2010 (CTA 2010), Part 24, Chapter 1, defines a ‘company’ as ‘any body corporate’.

The Northern Ireland Housing Executive was created as a separate legal entity. It is therefore, without specific exemption, chargeable to corporation tax. It does not meet the definition of a Northern Ireland local authority in CTA 2010, Part 24, Chapter 1, Section 1130.

Proposed revisions

Legislation will be introduced in the Finance Bill 2021 to amend the CTA 2010 to include the new exemption from corporation tax for the Northern Ireland Housing Executive.

Summary of impacts

Impact on Treasury (£m)

2020 to 2021 2021 to 2022 2022 to 2023 2023 to 2024 2024 to 2025 2025 to 2026
None -20 -ten -ten -ten -ten

These figures are presented in Table 2.1 of the 2021 budget and have been certified by the Office for Budget Responsibility. More details can be found in the policy costing paper released alongside the 2021 budget.

Economic impact

The measure is not expected to have significant macroeconomic implications.

Impact on individuals, households and families

This measure has no impact on individuals, households or families as it affects only one public body in Northern Ireland. The measure should not affect the formation, stability or breakdown of the family.

Equalities impacts

As the measure has no impact on people, there is no impact on equalities.

Impact on businesses, including civil society organizations

This measure should have a positive impact on the Northern Ireland Housing Executive by granting it exemption from corporation tax. Negligible one-time costs will include familiarization with the change.

There should be no ongoing costs. There will be a continued saving as the Northern Ireland Housing Executive will no longer be subject to corporation tax.

The customer experience is expected to remain the same as there is no change to the way businesses or civil society organizations interact with HMRC.

This measure should have no impact on civil society organisations.

Operational impact (£m) (HMRC or other)

HMRC does not foresee any IT or operational impact for this change.

Other impacts

Other impacts were taken into account and none were identified.

Monitoring and evaluation

The measure will be reviewed by contacting the taxpayer groups concerned.

Additional tips

If you have any questions about this change, please contact Lorraine Coster on phone: 03000 585 676 or email: lorraine.coster@hmrc.gov.uk.

Luisa D. Fuller