§ Mr. DoddsTo ask the Secretary of State for Northern Ireland what assessment he has made of the impact of the Budget on manufacturing industry in Northern Ireland. [112614]
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§ Mr. PearsonProductivity is vital in improving the competitiveness of manufacturing industry. Budget 2003 introduced a number of new measures that should enable United Kingdom companies, including those in Northern Ireland, to meet the productivity challenge.
The Research and Development tax credit will be made more accessible to small companies in particular through a number of measures including a reduction in the minimum expenditure threshold from £25,000 to £10,000. This will increase the number of Small and Medium Enterprises (SMEs) benefiting from the scheme. There will also be a one year extension of the 100 per cent. First Year ICT capital allowances scheme. This will be available to 89,000 small businesses in Northern Ireland.
VAT compliance costs will be reduced for small and newly registered businesses thus benefiting 13,000 businesses in Northern Ireland. In addition, further steps have been taken to further boost enterprise in enterprise areas, which includes 230 wards in Northern Ireland. From 10 April 2003 all non-residential transactions are now exempt from stamp duty in these enterprise areas.
The measures announced in Budget 2003 build on those announced in previous budgets (such as the introduction of the 125 per cent. R&D tax credit for large companies and the reduction in the corporation tax starting rate for small companies). The net effect of the Government's corporation tax changes since 1997 is to reduce the corporation tax rates to the lowest in UK history. Manufacturing industry in Northern Ireland now faces one of the lowest tax burdens in the EU.