HIGH-profile critic of offshore finance centres Richard Murphy says his campaign against the UK’s subsidy of the Isle of Man is now over.
He says the loss of government revenue totalling up to £200m vindicates his claim that the VAT revenue sharing arrangement amounted to subsidy.
The loss of £75m in revenue announced this week comes on top of a £100m sum from the last forced revision of the revenue sharing deal in 2009.
But in his Tax Research UK blog, Mr Murphy predicted the that the resulting ‘economic crisis’ for the Isle of Man would force it to radically overhaul its economic policies and ‘tax haven’ status.
He said: ‘Justice has been done, I am pleased to say.
‘A subsidy to an island that did not need it so that it could undermine the effectiveness of the operation of the UK’s tax system has been removed.
‘This move does not in any way impact on the fiscal status of the Isle of Man but it does require that it raises its own revenue to pay for its own government in future if it insists on pursuing its wholly unacceptable taxation policies.
‘I am also pleased to have been credited with playing a part in this. And I am pleased that, yet again, my estimates have been proven remarkably accurate.’
The Manx Government has always strenuously denied that our VAT share represented an effective subsidy from the UK, as Mr Murphy maintained.
‘It’s not a subsidy because it’s an agreement,’ Chief Minister Tony Brown insisted.
The VAT deal made headlines in the UK press with one newspaper reporting ‘UK halts VAT subsidies to Isle of Man’.