Corporation Tax: exemption for Northern Ireland Education Authority
Published 22 November 2017
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Who is likely to be affected
The measure affects only the Northern Ireland Education Authority.
General description of the measure
The measure provides an exemption from corporation tax for the Education Authority, the Northern Ireland body set up under the Education Act (Northern Ireland) 2014 which provides state funded education from 1 April 2015.
Policy objective
The measure is intended to ensure consistency of tax treatment for the provision of state funded education across the whole of the UK. Currently, the equivalent bodies in England, Wales and Scotland are exempt from corporation tax. The Education Authority is not exempt, though its predecessors were.
Background to the measure
As a result of a restructuring of Northern Ireland local government bodies in 2014, 5 Education and Library Boards were abolished and a new body, the Education Authority, was established.
Detailed proposal
Operative date
The measure will have retrospective effect from 1 April 2015 when the Education Authority was established.
Current law
Corporation Tax Act 2009, Part 2 Chapter 1, Section 2 requires corporation tax to be charged on the profits of ‘companies’. Corporation Tax Act 2010 (CTA 2010), Part 24, Chapter 1, defines a ‘company’ as ‘any body corporate’. The Education Authority was established as a separate body corporate. It is therefore, without a specific exemption, chargeable to corporation tax. It does not meet the definition of a Northern Ireland local authority within CTA 2010, Part 24, Chapter 1, section 1130.
Proposed revisions
Legislation will be introduced in Finance Bill 2017-18 to amend CTA 2010 to include a new section 987B to provide for the new exemption from corporation tax for the Education Authority.
Summary of impacts
Exchequer impact (£m)
| 2017 to 2018 | 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 |
|---|---|---|---|---|---|
| Negligible | Negligible | Negligible | Negligible | Negligible | Negligible |
This measure is expected to have a negligible impact on the Exchequer.
Economic impact
The measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
This measure has no impact on individuals or households as it only affects Northern Ireland public bodies.
The measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
As the measure does not impact on people, there are no equalities impacts.
Impact on business including civil society organisations
This measure is expected to have no impact on businesses or civil society organisations, as it only affects the Northern Ireland Education Authority.
Operational impact (£m) (HM Revenue and Customs (HMRC) or other))
HMRC does not anticipate any IT or operational impacts for this change.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be kept under review through communication with affected taxpayer groups.
Further advice
If you have any questions about this change, please contact Lorraine Coster on Telephone: 03000 585676 or email: lorraine.coster@hmrc.gsi.gov.uk.