This is the third part of the Topical Talks business roundtable.

Chairman Richard Butt turned the conversation over to the tax cap and whether it was working.

[Treasury Minister Alfred Cannan said in his 2018 Budget speech: ‘I stated that the tax cap would start a gradual increase so that it is at £200,000 per annum at the end of this administration. To confirm, from April this year [2018] the tax cap will rise from £125,000 per annum to £150,000 per annum.’]

Dr Alex Allinson, MHK claimed the cap has lost some of its initial attraction and there were political implications.

Gary Lamb, Manx Telecom chief executive, said he thought the system worked before [high net worth people] had to ‘elect’ to take the cap for a period of five years.

John Coleman of Microgaming said it was an anti-avoidance mechanism.

But he said the world of today plans for 12 to 24 months ahead and not necessarily five years.

Dr Allinson said you could argue that was in itself divisive because you were labelling yourself as a tax capper.

John Coleman said: ‘What is the issue? Why is the tax cap a political thing?’

Dr Allinson said he thinks it is political because people assume the more you earn the more you pay and put in to society.

‘There is a concern from some people in the community, that wealthy individuals are coming to the island and not paying their way.’

Gary Lamb, Manx Telecom chief executive, hit back by saying people who are eligible for the tax cap ‘generate jobs and business’ in the island.

Mr Butt asked: ‘But are they all doing that?’

John Coleman stressed: ‘We have to be very careful here.

‘This is not an argument like Google or Starbucks.

‘The issue with those companies is they are not paying their fair way when they earn money from UK individuals.

‘This is, I suspect, in 99 per cent of the cases of the tax cap, people who are not earning their revenue from Isle of Man residents. There is no money leaving the island and that they are not paying tax on, in my opinion.

‘This is money earned elsewhere and there comes a point in time [when you ask] how much tax is enough?’

Mike Foy, chief executive of Utmost Wealth Solutions, said: ‘I suspect there is a political edge within Treasury over Moneyval and the like. We are a grey-listed jurisdiction. Let’s be honest about it.

‘All the lovely discussion we have had today would be cut dead.

‘There is the risk that some businesses would grind to a halt if we ended up on an OECD blacklist. I predict some businesses would disappear overnight. I suspect it would kill some businesses.

‘If you operate from what is seen to be an officially listed dodgy jurisdiction, things like tax caps just play into that.

‘You look at some of the stuff that the island got challenged on during the Moneyval visit, there was stuff that the island was supposedly doing wrong: the zero-10 regime seemed to be inflammatory ... all points you towards the words “tax haven”.

‘So having a very flexible tax cap just plays into that so you’re a place where people go to avoid paying more tax.’

Carol Glover argued that a political change in the UK government could mean that many more people with wealth choose to move to the Isle of Man and we should plan for that option.

Mike Foy argued that if Labour won power it would be ‘our biggest single most strategic risk. You may get capital control’.

Anybody looking to come to the island would just not bother, he argued.

Mr Lamb said: ‘I don’t think corporation tax for entrepreneurs is an issue.

‘Most entrepreneurs, when they start a business, don’t make money.

‘What is of interest to them is capital gains tax because ultimately they will exit and earn money from that.’

Mr Foy argued the island was not yet out of the woods in terms of its relationship with the OECD.

Mr Foy, who scooped the business person of the year award at the Isle of Man Newspapers Awards for Excellence, said: ‘I think the economy is in a really fragile state.

‘We’re fine as an island. We have diverse industries and we capitalise on opportunities but my single biggest fear is for the Isle of Man economy .

Mr Foy added: ‘Thirty-two years of unbroken growth, it is a bit of a weak story, I think.

‘It’s fragile and it would not take much I think to tip things over. Without core businesses the island would sink back quite quickly because the people that could move, they would.’

The discussion took place shortly before Christmas and Geoff Kermeen, a director of Keystone Law said it was very important to send cards.

He said: ‘Even as the business world moves closer to paperless offices I think everyone should still send Christmas cards.’

John Coleman of Microgaming said that the company used to spend thousands on sending Christmas gifts.

‘We decided that we were going to spend it on charity, so we invite our clients and contacts to nominate charities every year.’

The meeting heard that Isle of Man Newspapers had successfully concentrated on supporting the Year of Our Island initiative for the last year and this campaign ends next Easter.

Isle of Man Newspapers is preparing to ‘rev up’ with a new campaign which will be unveiled soon.