THE UK treasury’s inability to calculate the corporation tax paid by businesses operating in Northern Ireland leaves Stormont at risk of facing “permanent” negotiations with London about the size of its annual block grant from London, Democratic Unionist MP Ian Paisley jnr said yesterday.

Claiming that the treasury’s estimates vary by hundreds of millions, Mr Paisley told the treasury minister David Gauke yesterday that “people would buy into this a lot quicker if you could put a figure on it”.

Mr Gauke told the House of Commons Northern Ireland Affairs Committee a figure was impossible because HM Revenue and Customs does not break down by region the corporation tax paid by companies.

Between a half and two-thirds of Northern Ireland-owned businesses pay corporation tax, but this does not include businesses, such as supermarkets, which operate in the North but are based in Britain, said Mr Gauke.

Northern Ireland Secretary of State Owen Paterson has pushed for the creation of a 12.5 per cent corporation tax rate for the North, in a bid to boost private-sector activity and wean the North off its heavy dependence on public sector jobs.

In the past, the treasury was extremely doubtful about the move, but opinion there has softened: “If the treasury had wanted to kill this off we would have done so,” Mr Gauke told the DUP North Antrim MP.

He cautioned that a 12.5 per cent rate had not been sanctioned and a final decision would not be made until a consultation with Northern politicians, businesses and the wider society was completed in the coming months.

Under the European Court of Justice’s Azores judgment, the North would be compensated by the treasury for any losses caused by cutting corporation tax, before expected higher revenues from lower rates materialised.

“Under the Azores judgment there has to be genuine devolution. If corporation tax receipts were lower than expected then that is something that the Northern Ireland Executive would have to deal with,” said Mr Gauke.