The island’s share of pooled Customs revenue has climbed back to levels not seen since before the VAT bombshell.

Our public finances reeled from the loss of some £200m in VAT revenue - then a third of government income - after the UK revised the Customs revenue sharing arrangement twice in two years, in 2009 and 2011.

Our share of revenue from the Common Purse fell from a high of £464m in 2006-07 to a low of £252m in 2012-13.

But latest government accounts show that income from VAT was £64m above forecast in 2019-20 with shared revenue now totalling £433m, of which £402m was VAT income.

Shared and non-shared Customs revenue contributed £444.5m to total Treasury income of just under £923m.

Under the Final Expenditure Revenue Sharing Arrangement (FERSA) signed in February 2016, the amounts collected are agreed in advance with the UK and are based on detailed surveys of household and business expenditure and not on national income data.

Finalising the latest FERSA calculations with the UK has led to the £64m VAT windfall, and allowed the release of sums prudently held back in reserves over the last three years.

This has enabled £40m to be transferred to fund to support the economic impact of Covid.

In 2006-07 we received £464m from the common pool, but this slumped to £361.8m the following year and £366.6m in 2008-09, and then to £339.4m in 2009-10 and £337.5m in 2010-11.

Following the second VAT bombshell, our share from the pool was reduced to a basic £227m in 2011 plus a transitional payment of £45m from 2011-12 (total £272m) and £25m for 2012-13 (total £252m).

Provisional shares of £270m for 2013-14, £278m for 2014-15 and £286m for 2015-16 were set out, pending FERSA.

The 2016 agreement provided for the island’s share of common duties to rise by 4.5% a year, increasing to £311m in 2016-17, £324.9m in 2017-18 and £339.5m in 2018-19.

But in the interests of prudency, the Manx government budgeted for an annual rise of 3%.

Common duties that form part of the share agreement includes VAT, beer, wine, spirits, cider and perry, tobacco products and pool betting.

In 2019-20, our shared Customs revenue including VAT and excise duty totalled £453.1m, against a budgeted £369.7m and an actual figure for 2018-19 of £358m.

Treasury also received £11.3m of non-shared gambling duty and air passenger duty.

Online gaming receipts were lower by £1.6m due to business changes within the sector and air passenger duty was £224,000 lower due to the collapse of Flybe.