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nickyw

Shop Local And Buy Manx - Beat The Vat Black Hole!

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Everyone who is pleased to live in this green and pleasant land should realise that continuing to spend money in Tesco, B&Q, M&S and other shops which are foreign registered companies (i.e. they are not Manx registered companies) is a sure way to help the Island dig ourselves into a deeper hole, what with the UK's dramatic surprise VAT sharing deal announced last week.

 

SHOP LOCAL AND BUY MANX!

 

If you must shop in M&S etc., tell them you think they should re-register as a Manx company to truly support the local economy.

 

Is there any support out there for this simple idea?

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I'd say so. But I'm really lazy so I'd need someone to draw up a list of companies to boycott. Although, if my income tax rises to make up the difference then I may just go for the cheapest option...

Edited by Mr. Sausages

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We need to know the numbers, how it is all worked out and whether what you are saying is true.

 

The big shops are distributing a good deal of money via wages on which people pay various forms of tax. And they use local services. They are also collecting VAT locally and many of them sell local goods.

 

Given that companies both local and foreign are currently zero taxed I'm not convinced that there is an issue.

 

That said I'm certainly trying to buy local produce when possible. That would be more about people choosing what sort of food they buy rather perhaps than where they buy it.

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How does not shopping at M&S, B&Q, and Tesco help?

 

Local companies (barring banks and property companies) don't pay tax, and even foreign companies' turnover is included in GDP for VAT purposes.

 

Shopping at companies which sell local produce is the best way to help, but apart from raw meat and fresh veg, most store products are imported. Even most fish, which is very sad.

 

S

Edited by Sebrof

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My MHK told me. I admit I believed him! May I suggest that although I do not understand exactlyhow it works out to the Island's disadvantage, there may well be someone here who could explain it in simple terms.

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Agree with the sentiment, but the hard reality (ignoring local outlets of UK shops) is that it is tempting to buy off the net at a greatly reduced price. I have just taken delivery of one product which, to buy locally, would have cost around £204, but paid £89.99 including postage. Placed the order on Monday and it arrived yesterday. That sort of deal really doesn't make shopping locally attractive.

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My MHK told me. I admit I believed him!

 

Who is your MHK?

 

Get him to come on here and explain it. If he is right then it would be important information.

 

ETA: Gladys with maximum respect the online thing is a related but different issue. This about B&Q, Tesco, M&S and other local shops which are designated foreign companies.

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My (poor) understanding is that VAT paid here (on Island) to companies incorporated in the UK forms part of the UK's contribution to the Common Purse. Therefore, the Island loses out twice! The UK benefits and we don't get the credit. I'm no expert, perhaps someone else here is.

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My MHK told me. I admit I believed him!

 

Who is your MHK?

 

Get him to come on here and explain it. If he is right then it would be important information.

 

ETA: Gladys with maximum respect the online thing is a related but different issue. This about B&Q, Tesco, M&S and other local shops which are designated foreign companies.

No, I don't think it is different because the VAT on the purchase goes to a UK retailer's return and doesn't 'count' (however it is counted) towards the IOM's contribution to VAT revenues. It probably doesn't count as IOM spend in the arcane formula that works out the VAT share. In that way, I think that buying over the net or through mail order off-island for import into the island is a double or even triple whammy for the IOM. The VAT goes directly to UK, the transaction doesn't count in the VAT sharing arrangement and no profit/jobs in the IOM are supported by the transaction. Putting it simply, that purchase benefitted no-one on the IOM except me (and, believe me, I did have a bit of a wrestle with my conscience, but when I worked out how much I would have to spend to support a local business, self-preservation won the day!).

 

In the latter regard, dealing with the local branches of B&Q etc. may not help our position under the VAT arrangements, but at least they support local jobs.

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My (poor) understanding is that VAT paid here (on Island) to companies incorporated in the UK forms part of the UK's contribution to the Common Purse. Therefore, the Island loses out twice! The UK benefits and we don't get the credit. I'm no expert, perhaps someone else here is.

 

If that is what your MHK is saying is true then we all need to see the facts and figures. He should go public with the information.

 

Meanwhile do not forget that what you are prosing affects many people's jobs.

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My (poor) understanding is that VAT paid here (on Island) to companies incorporated in the UK forms part of the UK's contribution to the Common Purse. Therefore, the Island loses out twice! The UK benefits and we don't get the credit. I'm no expert, perhaps someone else here is.

Fact is, Nicky, no one is an expert because the terms of the arrangement are kept under wraps. But what you say above makes sense except that it is not so much where the company is incorporated but where it is VAT registered that would count, I guess.

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Tesco, B&Q, M&S, Next, Boots, etc etc employ a lot of local people directly and indirectly who would otherwise be unemployed. Your MHK is an idiot.

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My (poor) understanding is that VAT paid here (on Island) to companies incorporated in the UK forms part of the UK's contribution to the Common Purse. Therefore, the Island loses out twice! The UK benefits and we don't get the credit. I'm no expert, perhaps someone else here is.

 

If that is what your MHK is saying is true then we all need to see the facts and figures. He should go public with the information.

 

Meanwhile do not forget that what you are prosing affects many people's jobs.

 

Yes But do all those local jobs not replace the jobs lost over the last few years at the local shops that shut down ? :(

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Surely it would lead to the companies becoming VAT registered or incorporated here (if it actually makes a difference) to attract the trade rather than just closing or making mass redundancies.

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Sorry to labour the point, but it may be the very fundament of recent events. Let's take the scenario a couple of years ago when the VAT sharing agreement was re-negotiated, the UK said you (the IOM VAT office) collect X amount and so what you expect to get back should be based on that figure as that is what the IOM contributes to VAT. No, no, says the IOM, our residents also spend X plus to non-IOM VAT registered businesses, whether they have a local presence or not. Therefore, it is only fair that we should have some kind of recognition of that in our share of the VAT pot. Okay, says the UK, we'll base it on GDP as that can be a measurable yardstick of how much IOM residents spend in total and so indicate how much they pay to non-IOM VAT registered businesses.

 

Then economic meltdown and the UK looks again at the agreement. Hmmm, how do we definitively measure how much IOM residents pay outside of their VAT collection catchment? Not really quantifiable, so it becomes vulnerable.

 

It is only supposition, but I really could not understand why the UK would agree in the first place to an apparently very unfavourable VAT share, were it not that there were material but unquantifiable contributions made.

 

For that reason, buying goods off island from off island VAT registered businesses is doing the IOM no good whatsoever.

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