An Isle of Man Tax Bill
An Isle of Man Tax Bill

On Friday, 1 October 2021, the United Kingdom and Isle of Man Governments will be increasing VAT on hospitality and attractions.

“Increasing the tax on hospitality and attractions at the start of the off-season is precisely the wrong thing for Manx businesses and workers,” said Michael Josem, of the Manx TaxPayers’ Alliance.

“We should be supporting local businesses and workers through the winter, not slugging them with higher taxes when the weather gets colder and wetter. Avoiding tax increases is even more important after an already dreadful period of no tourism during the COVID-19 pandemic and a slow recovery at the end of their summer period.”

The Isle of Man generally replicates the VAT arrangements of the UK, with some exceptions. But even if the IOM were to fully replicate the UK’s VAT arrangements, that is all the more reason for the IOM Government to make representations on behalf of the people of Mann to the UK Government on this issue.

According to a statement issued by the Isle of Man Government, the Isle of Man Government decided to increase the VAT on these services following “equivalent changes being made to VAT law in the UK.” We have found no public record of the Isle of Man Government making representations to the United Kingdom on this issue to try to protect the interests of businesses or workers on the Isle of Man.

Research from the Manx TaxPayers’ Alliance earlier this year showed that cutting the VAT last year benefited businesses, consumers and workers in the Isle of Man with lower prices. It enabled many families to spend more on entertainment and socialising on the Isle of Man, with more money going to the pockets of struggling businesses and workers in one of the sectors most disrupted by pandemic lockdowns.

“Cutting the VAT on restaurants and hotels was good for the people of the Isle of Man. Manx consumers benefited from a cheaper night out and Manx businesses benefited from lower taxes,” said Josem.