The island is at the centre of international media attention concerning allegations over the VAT treatment of business jets imported into the EU through the Isle of Man.

Chief Minister Howard Quayle said an on-going review by Customs and Excise has found no evidence of wrong-doing or mistaken refunding of VAT.

But he announced that UK Treasury has been invited to conduct an assessment of the practice for aircraft importation, with a particular focus on the VAT treatment of leasing arrangements.

He made the announcement at a bizarre press conference organised at government offices yesterday with short notice.

Journalists were not told in advance about the subject matter.

Mr Quayle described it as a matter of ’significant national importance’.

He said since February of this year the Isle of Man had been subject to co-ordinated inquiries by media associated with the International Consortium of Investigative Journalists (ICIJ). Mr Quayle said officers had been dealing with The Guardian, the BBC, leading German media and Japanese TV. He said he was due to be interviewed today (Tuesday) for Panorama.

The Chief Minister said the ICIJ claimed to have documents from a ’leading law firm’ to support allegations of abuse VAT avoidance. But he said the ICIJ had not presented the government with any evidence to substantiate its claims.

’It is imperative we take steps to defend the Isle of Man’s position,’ he said. ’Where our integrity is challenged we will not be complacent.’

Mr Quayle said during the course of an internal review no evidence had been found of wrong-doing or any reason to believe the Manx Customs and Excise division had been involved in the mistaken funding of VAT.

He said the island follows the same policy, rules and laws as the UK for VAT treatment of importation of aircraft into the EU.

Since 2011, Isle of Man Customs and Excise has raised more than 30 assessments for under-declared or over-claimed VAT against businesses in the aircraft leasing sector, involving about £4.7m of VAT.

An internal review began in October last year. Of 262 live VAT registrations in the sector, Isle of Man Customs and Excise has so far conducted 33 audits to date and a further 13 audits are currently under way.

The scope of the assessment by HM Treasury will be defined and published in November, with the work being completed in 2018.

Up until 2011, corporate jets over 8,000kg were zero-rated for VAT but then became VAT-able - but you could claim it all back if you used the aircraft for your business.

Mr Quayle said: ’We are confident we have followed the procedures.’

Treasury Minister Alfred Cannan MHK said: ’The assessment by HM Treasury further demonstrates the Isle of Man is committed to protecting its reputation as a leading international business centre.

’The Isle of Man is not a place that welcomes those seeking to evade or abusively avoid taxes.’

Reporters at the press conference suggested the cloak and dagger nature of the press conference made it look like the government was panicking. Mr Quayle denied that was the case. He revealed Cabinet Office had to wait for sign off from UK Treasury before it could release the statement.