No plans to change VAT rates, government says

The Isle of Man Chamber of Commerce has called for VAT rates to be reviewed

There are currently no plans to make any changes to VAT rates, the government has said.

It comes after the Chamber of Commerce backed a cafe owner's call for an overhaul of Manx VAT rates for hospitality firms to help boost recruitment to the.

A spokeswoman for the government said while a focus was being placed on increasing the number of economically active new residents, it had "committed to comply" with its VAT agreement with the UK.

The island's 20% standard rate mirrors that in the UK, and national VAT data is used to calculate the share of indirect tax revenues the island receives from the UK under the Final Expenditure Revenue Sharing Arrangement.

However, she said a number of initiatives run by the Department for Enterprise to support the hospitality sector and "address key barriers for growth" were being progressed.

They included working with the Visit Agency to "stimulate demand" for the hospitality sector and the "wider local economy", as well as bringing forward the economic strategy.

Earlier this week, owner of the Victory Cafe Vicky Cottier said that hospitality businesses could not compete with other employers to offer staff salaries they "truly deserve" as profit margins were "horribly squeezed".

The spokeswoman added that hospitality businesses "experiencing operational difficulties" were "encouraged" to contact Business Isle of Man for support.

She said: "A focus is being placed on increasing the number of economically active new residents, who can provide needed skills and investment into the island."

Under the plans the government intended to have 1,800 new roles filled by 2026, she added.