Exemption from Corporation Tax for Northern Ireland Housing Executive
Published 3 March 2021
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Who is likely to be affected
The measure affects only the Northern Ireland Housing Executive.
General description of the measure
The measure provides an exemption from Corporation Tax for the Northern Ireland Housing Executive, the Northern Ireland body which provides state funded housing.
Policy objective
The measure is intended to ensure consistency of tax treatment for the provision of state funded housing across the whole of the UK.
Currently, the equivalent providers of state funded housing 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 wholly relieving, with retrospective effect from 1 April 2020.
Background to the measure
The Northern Ireland Housing Executive was established 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
Operative date
The measure will have retrospective effect from 1 April 2020.
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 Northern Ireland Housing Executive 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 2021 to amend CTA 2010 to include the new exemption from Corporation Tax for The Northern Ireland Housing Executive.
Summary of impacts
Exchequer impact (£m)
| 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 |
|---|---|---|---|---|---|
| Nil | -20 | -10 | -10 | -10 | -10 |
These figures are set out in Table 2.1 of Budget 2021 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Budget 2021.
Economic impact
The measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
This measure has no impact on individuals, households or families as it only affects one Northern Ireland public body. The measure is not expected to have an impact on family formation, stability or breakdown.
Equalities impacts
As the measure does not have an impact on people, there are no equalities impacts.
Impact on business including civil society organisations
This measure is expected to have a positive impact on the Northern Ireland Housing Executive by providing an exemption from corporation tax. Negligible one-off costs will include familiarisation with the change.
There are not expected to be any continuing costs. There will be a continued saving as a result of the Northern Ireland Housing Executive no longer being liable for Corporation Tax.
Customer experience is expected to stay the same as there is no change to how businesses or civil society organisations interact with HMRC.
This measure is not expected to have an impact on civil society organisations.
Operational impact (£m) (HMRC or other)
HMRC does not anticipate any IT or operational impacts for this change.
Other impacts
Other impacts have been considered and none has 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 585 676 or email: lorraine.coster@hmrc.gov.uk.