Recently I had the great thrill of visiting the Tynwald – the Isle Of Man’s parliament.
The Isle Of Man is, of course, proudly a separate nation – a self-governing British Crown Dependency. Jersey has the same status, but there is something a little more accentuated about the Isle Of Man’s independence – the distinctive flag with the motto of the three legs, which is seen everywhere; much evidence of a separate historical narrative etc.
So, it was worth visiting the island just because of its independent status.
The Tynwald tour was very interesting – we were told about the make up of the tri-cameral system with its lack of party politics.
We were allowed to sit in the speaker’s chair in the House of Keys and I took the liberty of handling the gavel for my photo (see above).
We were reminded of the independence of the Isle Of Man because, when we were there, the last amendments to the Assisted Dying Bill were passed, reading for the bill to be given royal assent.
More widely, we really enjoyed our holiday on the Isle Of Man. There is so much to see from the amazing Castle Rushen to Norman Wisdom’s grave in the peaceful village of Bride. We will be going back, hopefully.
* Paul Walter is a Liberal Democrat activist and member of the Liberal Democrat Voice team. He blogs at Liberal Burblings.
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” a self-governing British Crown Dependency…. but there is something a little more accentuated about the Isle Of Man’s independence”
So the Isle of Man is an independent dependency? As is Jersey, Guernsey, Gibraltar etc.
Shouldn’t they all make up their minds? If they want to be British then, fair enough, we can give them some representation in the UK Parliament. This means that they have to abide by the same laws as the rest of us, including taxation laws.
What benefit do these “independent dependencies” bring to most of us in the rest of the UK? We all know about the tax benefits they can bring to the very wealthy of course!
@Peter Martin
“ ….to most of us in the rest of the UK”
We are not ‘in the rest of the UK’ – we are the UK. The Isle of Mann is not part of the UK.
So a valid question would be, “What benefit do these “independent dependencies” bring to the UK?”
@ Jana,
The Dependencies which are close to the UK, the Channel Islands and the Isle of Man, are a de-facto part of the UK if not de-jure. Just like they were a de-facto part of the EU when we were members. There are no trade barriers. Anyone can come to the UK as and when they like. They rely on the UK for their defence, international relations, and overseas representation for their citizens when they are abroad.
We’ll all likely to have to pay more taxes to support the armed forces. Will those in the “dependencies” pay their fair share?
Peter
From the “Isle Of Man Today” 5/11/24:
“The Isle of Man pays the UK more than £3m a year as a contribution towards services which include our defence.”
https://www.iomtoday.co.im/news/isle-of-mans-ps3m-payment-to-uk-government-for-services-outlined-in-figures-736079
@ Paul,
£3 million is of course better than nothing from a population of 84,500
This works out, according to my arithmetic, as 3/0.0845 as £35.5 million per million of the population.
The UK budget for defence is £68 bn
The UK population is 65 million ‘
This works out as £1.046 bn per million of the population
Or 29.5 times as much per person in the UK. If my arithmetic is correct!
The Manx people do get other benefits too.
We’ll all likely to have to pay more taxes to support the armed forces. Will those in the “dependencies” pay their fair share?
It might be worth pointing out at this point that the Channel Islands might, if asked to pay more for their defence, reasonably point out that His Majesty’s government singularly failed to even attempt to defend them in 1940, and would likely make exactly the same calculation again if the circumstances ever required it.
@Peter & @Paul – Remember the IoM (and Jersey and Guernsey) is also a tax haven hence why it is a favoured “residence” of the wealthy, such as Baroness Mone. Given this status, that £35.5m per million of population really does look like a pittence to the £1.046bn per million of the UK population.
The cost of the eight UK tax havens is open to discussion. I have seen figures cited of £245bn pa as being the tax revenue lost to the Treasury. However, given the reason for tax havens coming into existence and continuing to exist, I’ve not seen any one try and determine how much revenue could be extracted before people simply moved to a foreign owned tax haven.
>”The Manx people do get other benefits too.”
From friends that have lived on the IoM for some years, the world of the wealthy is very different to that of the typical Manx person, who have similar problems to people in England, especially those living in tourist areas such as Devon and Cornwall..
Tynwald may be party politics free, but some years ago it didn’t stop a particularly obnoxious former Tory Cllr from Stockport from being elected to the House of Keys.
When he lost his Tynwald seat there was much cheering by Cheadle LDs of a certain vintage!
There are large council estates on the Isle of Man and some 14% of residents on lower incomes. I would feel at home there and must visit. Sorry don’t have a Guardian link for the upper middle classes.
@ Roland,
“Remember the IoM (and Jersey and Guernsey) is also a tax haven….”
I hadn’t forgotten!
The whole purpose of the tax havens is to attract the wealthy, or rather the money of the wealthy, who want to dodge their taxes.
I’m sure most individual Manx citizens are pleasant enough and there are many places of interest for Brits who want to take a holiday there.
But if they truly want to claim pride in their independence they should pay their way like everyone else. However, if they did that, their levels of tax would have to be a lot higher and so the I.O.M. would cease to be a tax haven.
@Peter Martin What other benefits do Manx people get? Why are you calling us British one minute, and Manx the next? The IOM didn’t get the choice to be British, it was taken in an act of war by the British Crown
Kippers for breakfast. I had them every day when I was there. The Irish Sea herring is smaller and sweeter than the North Sea version. Absolutely delicious!
@peter “They should make up their minds”
Er, well they have. They’re self governing crown dependencies.
Thanks for the information and debate, all.
I agree with the comparison to Cornwall & Devon. As a self-exiled Cornishman, I get very tired of Panglossian travel shows about Cornwall. Simon Reeve and, to a good extent, Rick Stein are exceptions.
Go to Davidstow in November and then tell me Cornwall is lovely.
Similarly, the Isle of Man is shrouded in fog “the Manx cloak” most of the time even in summer. And, er, it’s a small island with limited resources or infra structure.
@ Simon,
“Why are you calling us British one minute, and Manx the next? ” </em?
Don't you regard yourself as British? If this designation of nationality is a problem, why do Manx people have British passports? They might mention that they were issued in the Isle of Man but they are still British passports.
@ Paul,
If Manx people have made up their minds, it is to have all the advantages of British citizenship without wanting to pay the same taxes and obey the same laws as the rest of us.
Peter
I ask you to carefully consider whether Manx people “have all the advantages of British citizenship”.
They have one hospital, one fairly low ranking theatre, no football stadiums or major sports facilities, one Wetherspoons and limited shops. Everything else needs several hours in a ferry or a protracted air/train journey. A handful of museums. An island which you could fully “explore” in a few months. Tops. Limited work opportunities. One university.
Where I live I am ten minutes walk from a hospital with six world class hospitals within an hour’s journey. In 45 minutes I can be in London with a world class array of entertainment, sports and you name it. And I am ten minutes walk from two major nature reserves. We have a great array of shops within a few minutes walk plus four cities with every kind of shop within an hour’s journey. A major football stadium within half an hour. Many beaches within an hours journey. Many viewscapes and houses and other attractions within east reach. We’re an hour away from a flight to anywhere in the world (on the Isle of Man you have to take a connecting flight to most places). We have ready (often free) access to a stunning array of world class museums in Oxford and London. We are close to many universities including, er, Oxford. Schools are abundant locally. We had a choice of four excellent (state) secondary schools within easy reach. Excellent work opportunities.
Compare and contrast.
Sorry to say this, Paul, but not everybody wants to live in so called ‘Middle England’.
Some of us are happy to live in small face to face rural communities where being a good neighbour actually counts for something. In particular, I don’t regard having a Wetherspoons is a mark of civilisation, especially given the right wing political views so frequently expressed by its owner.
‘People Count’ used to be a good old Liberal slogan. If the party forgets this it will pay the price.
You don’t have to be sorry David. It’s called freedom. But freedom within a small remote island is restricted, compared to freedom within a large multi-faceted island which is one of the leading economies in the world.
Next time you get snarled up in traffic on the M40 I’ll say a little prayer for you, Paul, (if that’s still allowed)………. and I wouldn’t like to walk through central Reading from the station to the Premier Inn after dark …….. both of which puts a bit of pressure on the notion of ‘freedom’.
On the relatively separate matter of Wetherspoons:
I don’t agree with Tim Martin’s politics.
Before sitting down at a table in Wetherspoons I have often moved the “Brexit” leaflet from the table top to the floor.
But TM is a good landlord and business operator. With some exceptions, his pubs are well-run and attractive in a cheap and cheerful way. His premises often use old town centre buildings that would otherwise be wasted. The pubs encourage interest in local history through their framed displays.
@Paul, I agree with your list, the need for ferries and their restrictions and costs are a real problem. My friends have real difficulty getting stuff shipped to the IoM – it is surprising how many UK businesses don’t ship to the IoM, but will ship to David’s rural community without charging a premium.
There is one benefit, which my friend’s teenage son is “benefiting” from and that is due to the small size, it has been relatively easy to get into IoM sports teams and thus get expenses paid to attend tournaments in England and the Channel Islands, and thus increased chances of getting seen by selectors/scouts. Obviously, you need to go to the tournaments to improve, given the limitations of the small pool of people on the IoM…
Another problem is many UK banking apps (eg. Nationwide) don’t recognise IoM passports etc. and so cannot be setup to manage accounts held at such institutions.
Just to be clear David, by saying that “it’s called freedom”, I meant that you have every right to the freedom to live rurally. I have every right to the freedom to live where I choose to.
@PeterMartin Manx people generally don’t have full British passports; we use them – as I said – as a consequence of an act of war
Income taxes are lower on the Isle of Man because the cost of living on a small island is significantly higher than living in the UK
@PaulWalter The NSC – home of Manx team playing UK league football FC Isle of Man – whilst not huge is a sports centre
@ Paul,
“I ask you to carefully consider whether Manx people…”
We can make the same argument about any of the smaller UK islands such as the Scilly Islands. Most of us are fine with the idea of providing some financial help to the smaller islands. It’s fair enough because the Islanders haven’t set themselves up as a tax haven. The UK tax havens result in a huge loss to the UK Treasury. Roland mentions a figure of £245 bn.
@ Simon,
” Manx people generally don’t have full British passports”
They entitled to a full British passport, like anyone else in the UK. There isn’t a separate Manx passport, or a separate Manx citizenship, but there could be if the Manx government chose to have one. Around half of Manx people were born in the UK. Which is the specific “act of war” which most concerns you? The history of the UK has been shaped by various “acts of war”, going back to even before the Norman conquest.
The I.O.M. population hasn’t had it any worse than many parts of the UK, and probably has had it far better because of its geography.
“Its inhabitants are British citizens.”
https://www.bbc.com/news/world-europe-18251379
@Simon Costain: “The NSC – home of Manx team playing UK league football FC Isle of Man – whilst not huge is a sports centre.”
Thank you, Simon. I stand corrected. Apologies.
Peter, I think this debate has run out of steam.
I would just say the word “climate” to you, in relation to the Isles of Scilly, having been there many times on holiday. They don’t grow outdoor tropical plants there by accident.
Interesting that several prominent British high-net-worth individuals and billionaires have, over the years, relocated to the Isle of Man to take advantage of its favourable tax regime………… which includes zero capital gains tax, zero inheritance tax, and a cap on personal income tax. I also seem to remember a few years ago a famous British racing driver purchased a helicopter over there exempt of VAT. Surely Westminster could/should legislate to change all this ?
Perhaps our resident Bolton Wandering economist, Peter Martin, could put some figures to all this ? No doubt J.S. Mill might, with some elasticity, have described this as ‘Freedom From’ and ‘Freedom To’. Pity, also, that it took until 1993 to formally abolish birching of offenders and also technically the death penalty.
@Simon – “ Income taxes are lower on the Isle of Man because the cost of living on a small island is significantly higher than living in the UK”
I’m not sure these are necessarily connected in the way you suggest. I’m not familiar with Manx government funding, but I suspect like other tax havens (and the Republic of Ireland), the revenues from the monies being sheltered are sufficient to enable the government to charge a lower level of income tax.
@David,
I’m not aware of the helicopter purchase but Lewis Hamilton obtained a £3.3 million VAT refund on his £16.5 million Bombardier private jet in 2013. His accountants came up with an Isle of Man leasing scheme that allowed him to dodge the VAT bill.
If you want some other figures, Simon has told us that the IOM generously (not! ) contributes £3million towards its defence costs. The GDP of the IOM is £5.8 bn. So, the British citizens on the IOM spend 0.05% of their GDP on defence whereas the rest of us are currently spending 2.4% of GDP with higher figures targeted shortly.
Maybe the IOM will up theirs to 0.06%?
And the justification for all this is the weather in the Irish Sea? It’s no better in the Manchester area! Maybe all Lancastrians should have a similar deal from the Westminster government. 🙂
@ David,
I don’t usually quote Richard Murphy but if you want more figures on the cost to UK taxpayers of the tax scams run by the “independent dependency”, the I.O.M, you could take a look at this from nearly 20 years ago:
“When I compared the VAT that it claimed to receive in its government accounts with its declared GDP the ratio was 21.7%. That’s odd as their maximum VAT rate is 17.5%. It’s even stranger as the UK, using a slightly more onerous VAT regime which is however broadly similar to the IoM’s collects just 6.1% of GDP as net VAT revenue……
…. the UK was subsidising the Isle of Man to the tune of at least £233 million a year to be a tax haven – which was well over a third of its government’s income at the time.”
https://www.taxresearch.org.uk/Blog/2017/11/06/the-isle-of-man-is-still-being-subsidised-by-the-uk-to-be-a-tax-haven/
@Roland Tell that to the low earners who pay tax after a limited personal allowance
Peter Martin 9th Jul ’26 – 11:12pm:
I’m not aware of the helicopter purchase but Lewis Hamilton obtained a £3.3 million VAT refund on his £16.5 million Bombardier private jet in 2013. His accountants came up with an Isle of Man leasing scheme that allowed him to dodge the VAT bill.
I’m shocked, shocked to find that VAT reclaiming is going on in this jurisdiction.
‘Can leasing companies, such as Motability, reclaim VAT?’:
https://gemini.google.com/
The VAT regime in the Isle of Man is the same as the UK (1979 Customs and Excise Agreement). At issue with the Lewis Hamilton case was that his social media account and other reports showed he was sometimes using the jet for private use, for example, to fly to Hawaii on holiday, and not exclusively for business use (such as flying from Nice Côte d’Azur to Cranfield for the British GP weekend). The VAT should have been apportioned accordingly. At the time, Isle of Man Customs and Excise took it on trust that such leasing arrangements were exclusively for business use as declared. After the allegations of misuse IOMCE has greatly enhanced post-registration compliance auditing.
@Simon – The IoM government, only needs to collect fractionally more tax from its tax haven activities to increase the income of its poorer residents (ie. those born in the IoM as different rules apply to people who have moved to the IoM). The fact it doesn’t, I suggest is scandalous…
@ Jeff,
If I understand you correctly, you’re making the point that all legitimate UK businesses can reclaim VAT on their inputs. So, if a company buys in raw materials to make a manufactured product it reclaims any tax paid on the raw materials but then hands over the VAT collected when the manufactured product is sold at a higher price. This is why it is called Value Added Tax.
There is scope for abuse when the inputs aren’t intended for the business itself but for the use of the business owners. Company cars being a prime example.
So if Mr Hamilton had considered that the private plane really was for business use he could have reclaimed VAT in the normal way in his quarterly returns, regardless of whether there was a leasing arrangement.
So why go off to the I.O.M? He must have been advised that HMRC wasn’t going to wear it but that the IOM treasury would.
It would be good if the IOM really has tightened up its rules but I don’t think many of us are convinced about that. The next time I buy a private jet I’d expect to get a better deal there.
More about the UK/IOM tax arrangements in this article.
https://www.theguardian.com/news/2017/nov/07/uk-isle-of-man-subsidy-tax-haven-common-purse-payments
@Roland Well, yes that’s what low earners think too – but they, like you, overestimate the number and wealth of resident high earners
@ Simon,
What would be a realistic estimate?
@Simon – For a tax haven, a “resident” is a bank account, the actual physical residency of its owner is irrelevant…
However, I understand your frustration, given the latest news:
UK to miss out on £600m a year after allowing US exemption from landmark tax deal
@Jeff – “ ‘Can leasing companies, such as Motability, reclaim VAT?’:”
Yes, as can any company supplying aids to the disabled, which is what Motability does.
Currently, I am purchasing bicycles to support “unlimited” cycle coaching (colloquially referred to as disability cycling). I do not expect to pay any VAT on the bikes and equipment I am purchasing, the companies I buy from can fill out the forms and include such sales in their VAT return and thus get full reimbursement.
Leasing is a fairly normal way to avoid actually buying stuff and thus avoid incurring VAT at 20% on the full purchase price. If you lease a car through a private lease, the amount of VAT you will pay will be reduced. Obviously, off-shoring the arrangement increases the benefit.
One of the surprising things about IR35 and HMRC’s favouring of “umbrella” companies operated by agencies is that the agencies have legally been able to locate the umbrella companies abroad (something individual UK resident contractors working under IR35 can not legally do), reports are these arrangements cost HMRC over £1bn of tax revenues pa.
@ Roland,
I’m not sure I understand your comment. Every company which is registered for VAT can reclaim VAT on purchased items. The question is whether VAT should be charged on sold items. In the case of cycles sold for disabled riders it is understandable that HMRC will allow a zero rating or a VAT exemption. The former usually works out slightly better for the end user.
https://www.taxually.com/blog/vat-exempt-and-vat-zero-rated-what-s-the-difference
I’m guessing around a thousand high net worth individuals are resident on the Isle of Man for tax purposes, though others suggest up to 3,000
Low earners on the IOM pay tax at 21% compared to – I think – 20% in the UK
Given the high cost of living on the island this is particularly galling for the ordinary folk
Simon, the basic/standard income tax rate in the IOM is 10%.
Peter, to say simply “And the justification for all this is the weather in the Irish Sea?…” – is, I believe, a strawman, because it ignores numerous points made above, most notably the individual historical evolutions of the the constitutional entities of the Isle of Man, Jersey and Guernsey.
Your comparison with the Isles of Scilly falls at the first hurdle. Approx 75% of the freehold of the land in the Isles of Scilly is owned outright by the Duke of Cornwall. As a Republican, I don’t agree with this. But the Duchy of Cornwall is unlikely to yield up this land and, even if they did, the Isles of Scilly are part of Cornwall and are highly likely to remain as such.
(I am reminded of a famous comment by Prince Philip when asked if he knew of the Isles of Scilly: “My son owns them”.)
There are 116 permanently inhabited islands in the UK (except for Great Britain, (part of) Ireland and the five inhabited Isles of Scilly)
I will buckle up for your “whataboutery” tour of all 116 islands!
I primarily wrote this piece as a travel blog.
But for clarity, while I admire the independence (current overall status) of the Isle of Man, I support a review and the appropriate updating of the Final Expenditure Revenue Sharing Arrangement (FERSA), the Isle of Man Contribution Agreement 1994, possibly the Isle of Man Act 1979 and certainly cuts to the common purse payment (in reviewing which David Gauke, when a minister, appears to have been overly generous to the Isle of Man).
We, the UK, should not be paying for the Isle of Man to be a tax haven. It is highly arguable that we are currently doing that.
When a person living within the historical territory of the Duchy of Cornwall dies without a valid will (i.e. intestate) and with no surviving relatives, their assets—known as bona vacantia (vacant goods)—pass to the Duke of Cornwall (Prince William) rather than to the UK Treasury. A similar scheme applies in the Duchy of Lancaster.
It’s time Lib Dem MPs attempted to stop this quaint feudal subsidy and the proceeds be diverted to the benefit of the general good – as it is in the rest of the country.
Here is the answer to the question above “why, historically, is the Isle of Man not part of the UK?”
“The Isle of Man isn’t part of the UK because it was never conquered or formally absorbed into the Kingdom of Great Britain or its successors. Instead, it evolved as a self-governing Crown Dependency, owing allegiance directly to the British monarch (as Lord of Mann) rather than the British Parliament.
Historically, this unique separation stems from several key factors:
Viking and Norse-Gael Roots: For centuries, it was part of the Kingdom of Mann and the Isles. By the time it came under the influence of the Scottish Crown (Treaty of Perth, 1266) and later English lords, it was already an established, distinct political entity.
The Lordship System: From 1405, it was ruled by the Stanley family (Earls of Derby) as a private feudal lordship under the English Crown, rather than an integrated county.
Revestment Act of 1765: The British Crown purchased the island’s sovereign rights from the Duke of Atholl to stop rampant smuggling. However, the British Government merely took over the lordship—it explicitly chose not to absorb the island politically into the Kingdom of Great Britain.
Independent Parliament: The island has retained its own parliament, Tynwald, which dates back over a millennium and has continued to govern internal affairs and taxation without Westminster interference.
Today, the UK remains responsible only for the island’s defence and foreign relations, while the Manx government handles all local taxes, laws, and internal administration.”
William le Scrope, King of Man, was murdered by Henry IV in 1399 whilst Scrope was on a private visit to Bristol. Thus the island became a crown possession in an act of war.
The island’s parliament Tynwald Court was not usurped by the English parliament as it had a far longer standing than that of England
The island makes an annual contribution to the cost of defence and overseas representation. There is no free ride
@ Paul,
Your point about “Viking and Norse-Gael Roots” would apply to the Orkney and Western Islands. The population of the Northern Parts of Britain , including Northern England, also have “Viking roots”.
You’re saying that the I.O.M. was never conquered, but Simon claims the opposite with “The IOM didn’t get the choice to be British, it was taken in an act of war by the British Crown”. You’re probably closer to the truth. As you say about the Revestment Act of 1765: “The British Crown purchased the island’s sovereign rights from the Duke of Atholl”. In other words the I.O.M. was bought by the Crown and the population came with it as “fixtures and fittings”. Or, exactly in the same way if the Crown had bought a farm; the livestock would have come with it too.
So why did the Crown choose to have less than a totally United Kingdom by keeping it separate? We can’t know for sure but it certainly wasn’t the result of any consultation.
Whatever the history, the fact remains that 80,000 or so British subjects are treated somewhat differently from the rest of us. They, and the Channel Islanders too, can be British with a devolved government, in the same way as Scotland, as long as they have more or less the same laws , pay the same level of taxes and make the same contribution to defence etc.
We shouldn’t tolerate the term “Crown Dependency” being a synonym for “tax haven”.
@ Simon,
“Low earners on the IOM pay tax at 21% compared to – I think – 20% in the UK”
I don’t know where you get your IOM figure from. It is easy enough to look up. It’s 10%. You’re confusing the maximum rate of income tax for the minimum.
In addition the IOM offers an income tax free threshold of £17k for single people and £34k for couples. In addition there are generous allowances for the disabled and blind etc.
The maximum amount of income tax is capped at £220,000 for single people. These figures explain why UK residents pay over £1000 per person each per year for defence whereas Manx residents pay only £30 each.
Simon says there is no “free ride” on defence for Manx residents. Maybe not, literally, but if everyone else is paying a fare of £100 for a train journey, and Manx residents are paying £3, then it is pretty close to it!
https://www.gov.im/categories/tax-vat-and-your-money/income-tax-and-national-insurance/tax-practitioners-and-technical-information/rates-and-allowances/
@Peter Martin – I was responding to the curved ? ball Jeff throw out about Motability: If they can’t charge VAT then its okay to reclaim the VAT rather than simply dropping it into their normal taxable expenses.
Rereading Jeff’s comment I think the issue is around the use of the aircraft for personal use, which has similarities to personal use of vehicles purchased and maintained by the business. From the little I’ve had to do with international finance, the use of off-shore arrangements make it a lot simpler to run the airplane within its own business which sells flights to customers, it could even run a frequent fliers programme and so private flights become rewards. That way VAT can be reclaimed on the purchase of the plane and only charged on the flights sold to customers.
We have to remember once you are very rich the high costs of some tax avoidance schemes become reasonable. It was this point which meant the Additional Rate @ 45% generated more income to HMRC than when it was set to 50%.
I rather thought the 3rd Duke and Duchess of Atholl sold the Isle of Man’s feudal and sovereign rights in 1765 for £70,000 via the Isle of Man Purchase Act 1765 (or Act of Revestment) to the British Crown.
However, the Atholls retained their private landed estates, manorial rights, and church patronage. Later, in 1805 The 4th Duke of Atholl sold his remaining manorial rights, privileges, and patronage to the British Crown for £409,000. No wonder the Atholls can still afford to retain their own private army in Scotland.
All of which is no good reason for the UK government under next week’s new Prime Minister to allow the IOM to be a tax haven for people with loads of dosh and good accountants/lawyers……. especially today when there is even more news about the Covid protective clothing scandal.
Peter: “We shouldn’t tolerate the term “Crown Dependency” being a synonym for “tax haven”.”
I don’t know whether you are actually reading my replies. I agree with you – as I said above. There are ample legal mechanisms for ensuring that the financial settlement with the Isle of Man is such that the UK do not subsidise their tax haven status. Indeed, as I said above when David Gauke was a minister he was inexplicably over-generous to the IOM in comparison with previous governments who are trending towards the less generous settlements. We need to get back to the less generous trend – the mechanisms are there to do it, specifically:
– a review and the appropriate updating of the Final Expenditure Revenue Sharing Arrangement (FERSA), the Isle of Man Contribution Agreement 1994, possibly the Isle of Man Act 1979 and certainly cuts to the common purse payment.
@ Paul,
I accept you are agreeing to an extent. A limited extent.
“There are ample legal mechanisms for ensuring that the financial settlement with the Isle of Man is such that the UK do not subsidise their tax haven status.”
So what are you proposing exactly? If the I.O.M. remains a tax haven the taxes raised will likely be insufficient for the I.O.M to properly pay their way on matters such as defence. Even if they were sufficient, they’d only be collecting taxes that had been diverted from the UK because the tax regime was lower in the I.O.M.
So the only way to completely end the subsidies, rather than simply reduce them, and which can be both obvious and hidden, is to end the tax haven status completely.
Are you agreeing with that?
Peter, please see my ample answers above. I have made it perfectly clear what I believe. Best wishes, Paul