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Andy Onchan

Is Jersey in trouble and could IOM be next to raise tax?

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42 minutes ago, Donald Trumps said:

So it's in our interest to have a closer relationship with the EU?

It’s certainly been in our interests to be in a customs and VAT union with the U.K. 

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Posted (edited)

If the UK leaves EU without a customs union agreement then VAT will most certainly be an issue for those IOM companies "doing biz" in EU.

However, it's possible that the UK government may keep VAT operating within it's own borders, in which case we may still have to account for VAT if Treasury/Tynwald think there will be any advantage to IOM coffers. On the other hand if the VAT take in IOM from that 'domestic' arrangement is negligible then we might have to start looking at GST etc.  

At least that's the way I look at it.

And oddly enough I have always maintained that we should have abrogated the EU customs union and raised our own tax to suit our demographics. I sincerely believe that VAT has screwed the visitor industry (duty free/reduced goods would have been a pull for visitors) and has been a barrier to population growth.

VAT doesn't create growth in itself, all that happens is that the added value ends up in in government coffers. It's an iniquitous tax for which no one has any control. It;s free money as far as the government is concerned.  

Edited by Andy Onchan
A bit more clarity
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The big problem would be getting through customs barriers at Liverpool/Heysham.  Could be a real pain.

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Just now, NoTail said:

The big problem would be getting through customs barriers at Liverpool/Heysham.  Could be a real pain.

Do you mean exiting UK or entering UK?

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Posted (edited)
25 minutes ago, Andy Onchan said:

If the UK leaves EU without a customs union agreement then VAT will most certainly be an issue for those IOM companies "doing biz" in EU.

However, it's possible that the UK government may keep VAT operating within it's own borders, in which case we may still have to account for VAT if Treasury/Tynwald think there will be any advantage to IOM coffers. On the other hand if the VAT take in IOM from that 'domestic' arrangement is negligible then we might have to start looking at GST etc.  

At least that's the way I look at it.

To my mind the main worry is yachting, aviation, and some trading entities whose entire reason for being here is just to access the UK-EU customs union as the big purchases they make are VAT rated and the assets operate in the EU. They will likely just go to somewhere in the EU and we’d basically get none of the current purchase activity “booked” here so our take could be considerably down. 

We might also have to look at a GST style ‘top up’ duty to plug any holes which is pretty much how Jersey and Guernsey started out before expanding GST. 

Edited by MrPB
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Just now, MrPB said:

To my mind the main worry is yachting, aviation, and some trading entities whose entire reason for being here is just to access the UK-EU customs union as the big purchases they make are VAT rated and the assets operate in the EU. They will likely just go to somewhere in the EU and we’d basically get none of the current activity “booked” here so our take could be considerably down. 

Correct.

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4 minutes ago, Andy Onchan said:

Do you mean exiting UK or entering UK?

Yes

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4 minutes ago, Andy Onchan said:

Correct.

If you look at our shipping and aviation registers I’d say VAT is the reason that 70% of the assets are ultimately registered here. If that future purchasing goes to Malta etc if the UK ditches the customs union we’d be left with pretty much nothing here I’d think. 

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