VAT to be cut by a further £75 million?

Reports suggest the latest cut in the Isle of Man's share of VAT revenue could be even worse than feared.

It had been widely speculated the United Kingdom would take a further £60 million off the Island, in addition to the £114 million lost when the revenue sharing arrangement was last revised, in 2009.

But it now seems the figure could be as high as £75 million, although the blow could be slightly softened if, as suggested, the latest sum is phased in over a three year period.

According to reports, the Island would lose a further £30 million in the first year of the new arrangement, with the sum increasing to £50 million in the following year, and the full £75 million annually after that.

By then, the total reduction in annual VAT revenue for the Isle of Man would be £189 million a year.

Treasury Minister Anne Craine is due to make a statement to Tynwald on the VAT revenue sharing arrangement during the early part of the July sitting, which starts today (Tuesday).