Brown (ours, not theirs) calm in face of VAT bombshell

‘DON’T overreact’ — that’s the message from Chief Minister Tony Brown MHK on the current tax crisis facing the Island. Last month a VAT bombshell was dropped when the UK Government revised the customs revenue sharing arrangement, resulting in a loss of £90m in revenue from April, rising to £140m in subsequent years.

‘The actions by the UK Treasury were clearly not expected,’ Mr Brown told a Junior Chamber of Commerce meeting last week.After all we had been negotiating for nearly a year with the UK over a new sharing arrangement and had only concluded a new sharing arrangement in March 2007.’

After being confronted with the changes, Mr Brown said the Manx Government told the UK it regarded the action as unreasonable, resulting in the reduction of income being phased in.

‘Clearly such a severe drop in income over the next two years will have an effect on our ability to provide services and support many areas we as government cover including events, charities, sports, arts to name but a few. However, it is very important that government manages the situation carefully and does not overreact, so as not to impact too adversely on the provision of public services and also importantly on the economy and businesses of the Island, many are provided with valuable income by providing government with services.

‘Confidence is important and we all need to be positive in moving forward.

‘Government has started a process of internal evaluation within all departments and boards to identify the impact of reducing their budgets by 15 per cent from April 1 2010. Departments are already looking to make reductions in expenditure in their 2009-10 budgets.’

Right Manxies, it’s time to buy local. Check out the links alongside and consider ordering from the Isle of Man this Christmas/holiday season. I am not sure how clued-up the sites are yet but there should be no VAT at all on sales to the US. The money should go to local businesses and not the UK Exchequer. If anyone knows more about this — please leave a comment or email kelly (at)