The Treasury Minister’s announcement that the Isle of Man government has reached an agreement with the UK over certain amendments to the 1979 Customs and Excise Agreement should be welcomed as a positive step for the island.

That’s the view of Paul Cawley, head of VAT, at KPMG in the island

Mr Cawley said: ‘Securing these amendments during a period of such political upheaval for both governments would not have been easy.’

He was speaking after the minister Alfred Cannan signed on the dotted line with the UK financial secretary to the UK Treasury Mel Stride

The Manx government called it a ‘significant moment’ in the island’s preparations for the UK’s withdrawal from the European Union on March 29, 2019.

Mr Cawley of KPMG said: ‘Most would acknowledge that Brexit remains a volatile matter and when the UK’s Prime Minister puts her draft EU withdrawal agreement to a Commons’ vote on December 11 there could be further surprises in store, particularly if MPs vote against the proposed deal.

‘Controversial though it may seem, were the Brexit process to be stopped, then Mr Cannan’s hard-won amendments would not see the light of day as those amendments to the “1979 Agreement” [which essentially deals with our removal from the EU’s VAT and customs territory] would not be required.

‘However, regardless of any potential future forks in the road, any responsible government can only proceed on the basis that the UK will follow the mandate of the 2016 referendum by exiting the European Union in 2019. Without the “1979 Agreement” a hard border would exist between the UK and the IoM with goods flowing between the two jurisdictions doing so on import/ export terms for VAT and Customs purposes.

‘Consequently, making these amendments and ensuring the “1979 Agreement” works for all eventualities, represents a vital step forward in maintaining the island’s membership of the UK’s VAT and Customs territory and protects future trade with our largest trade partner.’