Solicitors in Northern Ireland will have to continue to advise businesses over their tax obligations after the prime minister suggested the government would not change its mind with regard to corporation tax.

Speaking at a Newspaper Society event in Westminster, Gordon Brown said a cut in capital gains tax in Northern Ireland might not be necessary, as he believes incentives could lead to greater competitiveness in the province.

Mr Brown said: "I think we could make Northern Ireland as competitive as the south through incentives."

This news comes before Sir David Varney's review of corporation tax in Northern Ireland, as a result of which solicitors are hoping they can tell smaller businesses that they will be exempt from UK rates.

Last month MP Lady Sylvia Hermon had urged the government to consider the negative effects on small businesses of a flat 18 per cent rate of corporation tax in Belfast and Northern Ireland.

Solicitors could see Northern Ireland's small businesses having to pay the new rate by April, as the prime minister seems stuck on the idea of encouraging investment in the province through means other than cutting capital gains tax to 12.5 per cent.



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