Will traders be affected by VAT hike?

Treasury Minister Anne Craine is hoping the rise in VAT to 20 per cent from today (Tuesday) won't deter people from spending at the Island's shops and businesses.

The hike was announced by the Conservatives during their election campaign last year, and is expected to net an additional £25 million for the Manx Treasury, based on the current VAT sharing arrangement with the United Kingdom.

Mrs Craine says the extra revenue will replace government reserves which were used to make up the shortfall caused by the redrawing of the VAT agreement.

She says it's a welcome boost, and shouldn't impact too harshly on local traders: