Hospitality chiefs demand more government help

The group said the government had the power to lower alcohol duty on locally brewed beers

Pubs, bars, restaurants and hotels on the Isle of Man have called on the government to do more to help them.

The Licensed Victuallers Association (LVA) said firms faced a "crippling" 20% VAT rate and a tax rate that "disproportionately burdened" lower-paid workers.

The government said it was supportive but had to take account of other demands on the public finances".

The call came after more than 70 businesses met on Thursday.

The LVA called on ministers to “listen attentively” to the concerns of the sector and “address our island’s issues”.

The body said it was “unacceptable that someone earning the proposed Minimum Wage of £11.45 per hour would be taxed at the new highest rate of 22%”.

It also said National Insurance was a “punitive tax on employment, stifling both employers and employees”.

The island’s low NI and tax allowances were a “major cause of the staffing problems” the island faces, it said.

A new higher rate of personal income tax of 22% and revisions to NI thresholds were announced in February’s budget.

'Ineffective schemes'

The government previously ruled out making any changes to its VAT system, which mirrors the UK's.

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.

The LVA also criticised the government’s loan schemes for being “overly complex or inaccessible for struggling businesses”, called for the island’s minimum wage bands to be aligned with the UK to make it easier to recruit and train younger workers.

It also wants a cut in alcohol duty on locally-brewed beers.

In its statement the group said: “It's imperative that the government heed the expertise of those within the industry.

“Instead of implementing ineffective schemes with exorbitant costs, they must address our genuine needs and those of our workforce.”

In response the government said it understood parts of the sector were “experiencing a challenging period” and recognised the “important contribution it makes to our wider economy”.

“However, any solutions considered need to be appropriate and take account of other demands on the public finances and pressures being felt across our community as a whole,” it said.

The treasury and enterprise ministers would welcome a meeting with representatives from the sector “to ensure there is an open dialogue and a clear understanding, and importantly listen to concerns”.