There should be no need for further negotiation over the island’s VAT share if survey data is agreed, the Chief Minister told Tynwald.
Treasury Minister Eddie Teare MHK has previously conceded our share of VAT receipts could go down again as a result of a data collection exercise being carried out by Customs.
Speaking in Tynwald, Chief Minister Allan Bell insisted: ‘If the figures are agreed on both sides there should be no further need for negotiation. If there is disagreement of those figures, there is likely to be further discussion.’
The Manx government has lost about a third of its income following changes to the VAT revenue sharing arrangement since 2007.
The UK Treasury wants the island’s share to be equivalent to what we would receive if we had a standalone VAT system. We currently get about £270 million. A data collection exercise is being used to determine the size of the VAT share in the future.
A thousand households selected at random were asked earlier this year to complete a record of their income and expenditure and the survey was then expanded to cover business revenue and expenditure.
Chris Thomas (Douglas West) suggested that the government should consider pulling out of the Customs deal.
But Mr Bell said that would create more problems than it solved and he would not want to undermine business confidence by setting that hare running.
He said: ‘I don’t believe abrogation is the solution. There is no indication from the UK at all that they are unhappy with the way negotiations are going.’