Super-rich wouldn’t mind paying more tax

Tynwald buildings, Douglas

Tynwald buildings, Douglas

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Tax cappers wouldn’t mind paying a bit more tax, it was claimed in the House of Keys.

The comment came from Douglas West MHK Chris Thomas as he questioned Treasury Minister Eddie Teare over the government’s tax cap policy - a policy which the bankbencher believes is not working.

Mr Thomas said he wanted to thank the taxcappers for living on the island and suggested they would not mind paying a bit more tax. ‘I’m sure they would not,’ he said.

He told the Manx Independent that he had been told this was the case directly from one tax capper and indirectly from another two or three.

In the Keys, the Treasury Minister defended the tax cap policy, insisting the companies owned by those subject to it employed some 365 staff, paid £27.5m in salaries and remitted more than £2.25m in ITIP and £4.4m in National Insurance contributions, bringing a total direct benefit of approaching £17m to the Manx exchequer.

But he said he was unable to given details of the wealth and income of those electing to take advantage of the tax cap, saying that information would not be known until after the October tax return deadline.

Mr Thomas said a Treasury practice note required tax cappers to give details of their wealth and income. ‘Would the Treasury Minister agree to revisit the practice note?’ he asked.

Earlier this month, Mr Teare revealed that just 58 wealthy residents had elected for the £120,000 tax cap in the current financial year.

This compared to a peak of 95 individuals who benefited from the tax cap 2007-08.

Of the 58, just one moved to the island in 2014-15 tax year, one returned the previous year and 15 others had moved here since the tax cap was first introduced in February 2006.

Mr Thomas suggested this showed the policy has not worked. He said: ‘The super-rich are not being lured here which was the intention of this tax policy. Only 17 people have moved here because of the tax cap during its eight year existence.’

‘We are taxing the wealthiest living here less than they used to pay and should pay. Exempting 58 tax cappers from the pain of rebalancing is impossible to justify, especially in its context of stealth taxation of the poorer. Such a tax policy is unfair and is not working.’

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