Fears Over Island's Vat Deal

[manxman8180]

AT - Good post.

 

I think there is definitely room for optimism. Maybe this is just the shake up the Govt needs to kick start it into taking some really positive steps. Maybe we've had it so good (and easy) for the past decade or so, that we have lost sight of being innovative.

 

High end Manufacturing is growing here, so there is an opporunity to push this even harder. Oil and Gas exploration could be a real opportunity, if not for the DAFF fuckwits screaming about their precious seabeds.

 

There are big plans for windfarms off the north coast between IOM and Whitehaven area. Let them use some of our 12 miles and charge them for that.

 

I also wonder whether the UK calculate how much the IOM spends with UK companies? Do they even factor that in? I mean we all hear the whinging about how much of the Capital projects go to off-Island contractors. There could be £50m there......Even more reason to add in a significant Manx fiscal element to tender processes.

[pongo]

I assume this is Tony Browns fault too?

 

Hehhe. Any minute now someone will try to blame him for it.

 

One possibility is that there may not be any viable semi autonomous economic future for small geographically remote places. More or less what Rog was saying the other day.

[Slim]

One possibility is that there may not be any viable semi autonomous economic future for small geographically remote places. More or less what Rog was saying the other day.

 

That's a real danger. This does seem to be part of a concentrated attack on offshores, this, the EU members attitude towards zero-10, the health agreement, tax exchange agreements, proposals for global corporation tax...

 

How long until we're a British county with a council in place of a government and the channel islands are part of France?

 

There's no doubt we're in an adapt or die situation.

[Politician]

In the short term — whilst we consider the advantages of independence and then joining the European Union as a microstate — I think we will need to broaden the tax base considerably and undertake a wide-ranging programme of cuts and privatisation. For starters, I would recommend:

 

• Freezing the personal allowance and higher rate tax band for several years

• Increasing the basic rate from 10% to 12.5% and the higher rate from 18% to 22.5%

• Abolishing the tax cap (which has not worked, in any case)

• Increasing the upper limit for national insurance contributions to the UK level

• Removing the ability of the self-employed to treat Class 4 NIC as tax-deductible

• Introducing a standard rate of corporate tax of 10% (which also solves the zero/ten non-compliance problem)

• Introducing capital gains tax at 10%

• Introducing inheritance tax at 10% on estates over £1 million

• Introducing a £1 passenger arrival levy and £5 car arrival levy at the Sea Terminal, to be charged and collected by the Steam Packet

• Increasing the cost of work permits for new residents from £25 to 1% of annual earnings or profits (with a minimum of £250)

• Privatising the Manx Electricity Authority and Bus Vannin

• Closing final salary pension schemes for the public sector

• Reducing the Civil Service headcount by 10% through natural wastage

• Abolishing all local authorities and transferring their powers to Tynwald

• Replacing local rates with a national property tax, set at 0.25% of market value

• Introducing a £100 per capita waste collection charge

• Placing a moratorium on all new government capital projects

• Abolishing mortgage and loan interest over a five-year period (by reducing the maximum claim allowance by 20% each year)

• Introducing stamp duty at 1%

 

Off the top of my head, I have no idea how much these changes would raise, but I imagine the total could be considerably in excess of the £50 million to £100 million required. This would give us the financial stability we need should the UK attempt to revise the VAT sharing agreement again to our further disadvantage or intervene to damage our democracy or financial services sector — we would be ready to hold a referendum on independence and directly negotiate our relationship with the European Union.

[pongo]

How long until we're a British county with a council in place of a government and the channel islands are part of France?

 

It is not inconceivable that future generations here would be better off if that was the outcome. Our pain as the economy shrinks, their gain for it ending up more sustainable. Perhaps the economy has burned too bright.

 

ETA: might not

[Manxman2000]

How about £50.00 assisted emigration to the new world

[Slim]

In the short term — whilst we consider the advantages of independence and then joining the European Union as a microstate

 

That just isn't an option surely? We're nowhere near big enough to join Europe on our own.

 

Agree with most your suggestions though, particularly Zero/10. It's not worked. Not sure CG and inheritance tax is a good idea though, it'd put too many off.

 

Off the top of my head, I have no idea how much these changes would raise, but I imagine the total could be considerably in excess of the £50 million to £100 million required. This would give us the financial stability we need should the UK attempt to revise the VAT sharing agreement again to our further disadvantage or intervene to damage our democracy or financial services sector — we would be ready to hold a referendum on independence and directly negotiate our relationship with the European Union.

 

Yep, that's the challenge isn't it, tax our way out of the shortfall while maintaining some kind of competitiveness that's compliant in Europe.

[Politician]

That just isn't an option surely? We're nowhere near big enough to join Europe on our own.

Well, it's easily forgotten just how tiny Iceland is: their population is less than four times that of the Isle of Man. Many people hold Iceland partly responsible for the collapse in international banking, yet their negotiations to join the EU appear to be proceeding well.

[wazir]

On the otherhand it might be compensated for not having VAT - look at Gib and the Channel Islands...

 

How does it work using mail order in the channel islands? Does every site have to know if you should be charged vat or not?

 

Depends on the goods/services....

 

As a basic rule you can avoid the VAT though really the Customs & Excise people are meant to intercept packages from the CI and check if they VAT paid.

 

If it's work done in CI - like legal advice that is VAT free point blank.

[wazir]

I think that a lot of people have missed the point - especially Politician.

 

It doesn't matter how much tax you can squeeze out of Manx residents - it won't be enough - especially because the HNWI will just leave.

 

At the moment 90% of our income and 90% of our jobs come directly or indirectly from the international finance sector and its related industries (which includes most of the government jobs). Without this we will have no lawyrers, no banks, no accountants, no cafes, no retail, property prices drop, rental income drops, no entertainment (such as it is), no jobs, no need for all the substantial government departments etc.

 

The international finance sector is the only important sector to keep alive and anyone who says differently is living in a fantasy world. The IOM simply doesn't have the numbers to make it a viable contender in any other arena (especially not manufacturing given the cost of shipping to and from). Diversification is a good idea in the long term but is not going to help with this immediate issue - too little, too late.

 

For avoidance of doubt: the raising of taxes and an attempt to the join the EU in our own name is (1) probably not possible and (2) a really fucking ridiculous idea.

[Slim]

Well, it's easily forgotten just how tiny Iceland is: their population is less than four times that of the Isle of Man. Many people hold Iceland partly

responsible for the collapse in international banking, yet their negotiations to join the EU appear to be proceeding well.

 

That's still significantly larger. I just don't think we could afford it, the only option would be to join the UK properly, and be part of europe as a result.

[Slim]

I think that a lot of people have missed the point - especially Politician.

It doesn't matter how much tax you can squeeze out of Manx residents - it won't be enough - especially because the HNWI will just leave.

 

I think you've missed his point. It's a balance between raising tax to fill the shortfall but remaining competitive. Remember this is against a backdrop of rising taxes worldwide, so it may be possible.

[wazir]

I think that a lot of people have missed the point - especially Politician.

It doesn't matter how much tax you can squeeze out of Manx residents - it won't be enough - especially because the HNWI will just leave.

 

I think you've missed his point. It's a balance between raising tax to fill the shortfall but remaining competitive. Remember this is against a backdrop of rising taxes worldwide, so it may be possible.

 

Nothing that is happening internationally is seriously threatening the legitimate use of offshore centres.

 

We have got what it takes to be rich from international business or poor from domestic business. Simple as that.

 

If you doubt it then just look into the figures... The only thing keeps this place from being supported by fishing and farming with you and me out of our jobs is the international finance industry.

 

Think about your own job, without international finance how many clients would you have left?

[Ringwraith]

That's a real danger. This does seem to be part of a concentrated attack on offshores, this, the EU members attitude towards zero-10, the health agreement, tax exchange agreements, proposals for global corporation tax...

 

How long until we're a British county with a council in place of a government and the channel islands are part of France?

 

There's no doubt we're in an adapt or die situation.

 

If this is an attack on us (and other offshores), and I believe it is and have said so many months ago, then what are our options other than independence?

 

Can't the Queen instruct the Governor to dissolve Tynwald if we try to wriggle out of the 'attack' without full independence? Or impose other restrictions upon us?

 

Surely if we want to fight this effectively we need to make sure we are properly set up to do so in the first place. Legislation requires Royal Assent does it not, and if the attack is coming from the UK (EU) then will they not just block efforts to defend against it?

[Slim]

Nothing that is happening internationally is seriously threatening the legitimate use of offshore centres.

 

You're joking right? What about the g20 proposals for global corporation tax? The worlds governments are deeply upset that cash they've been pumping into the economy is being funnelled off to offshore branches, they want to plug these leaks up.

 

We have got what it takes to be rich from international business or poor from domestic business. Simple as that.

 

If you doubt it then just look into the figures... The only thing keeps this place from being supported by fishing and farming with you and me out of our jobs is the international finance industry.

 

Think about your own job, without international finance how many clients would you have left?

 

I've no idea what you're talking about wazir. Didn't you just do a complete 180?