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Northern Ireland’s business leaders have welcomed the extension of the government’s Covid support schemes and an investment incentive announced in The Chancellor's Budget, but have raised eyebrows at plans to increase corporation tax.

They said Rishi Sunak’s £25 billion “super deduction” - the equivalent of a two-year tax break which will cut taxes for businesses by around 25p in the pound, would help profit-making companies play a part in Northern Ireland’s economic recovery.

The move is intended to encourage companies to investment immediately to help the economy recover from the impact of Covid-19 and before the Treasury starts to rebuild its finances by raising taxes.

The well-flagged extension of the furlough scheme to the end of September has also been welcomed by business, as has the extension of the business rates holiday to the end of June and the extra £410 million in funding for Northern Ireland.

Meanwhile, the announcement that VAT will remain at the reduced rate of 5% for hospitality and tourism businesses, also until the end of June, has also offered cheer.

“Businesses will broadly welcome many aspects of today’s Budget, in particular the extension of the furlough scheme, which provides relief for firms facing enormous cash-flow pressures as a result of the pandemic,” Ann McGregor, Chief Executive, Northern Ireland Chamber of Commerce and Industry, said. “Providing additional, on-going financial support is critical for business survival.

“Restart Grants and the Recovery Loan Scheme will therefore play an important role in enabling firms to reopen safely and sustainably. The Super Deduction will give businesses which are performing well the confidence to make capital investments and enable them to play a part in Northern Ireland’s economic recovery, through creating jobs and developing exports,”

However, plans to hike corporation and personal tax in 2023 have not gone down so well.

The announcement that corporation tax will be raised to 25% from April 2023 - the first time the tax has been increased in over 46 years – is expected to dent the competitiveness of Northern Ireland companies, particularly when it comes to wooing inward investors.

The move means the tax businesses here pay will be double that across the border in the Republic where corporation tax is levied at just 12.5%.

It has also reopened the debate around whether the Executive should lower the tax independently of other º£½ÇÊÓƵ regions.