SIMON Hull, managing director of Conister Bank, looks at the impact George Osborne’s first budget as Chancellor of the Exchequer could have in the Isle of Man.

Mr Hull said: "This ‘emergency’ budget was always going to be extremely challenging for the new Chancellor given the speed at which It was produced, the size of the economic task in hand and, of course, the need for Mr Osborne to gain support from his coalition partners.

"Increases in taxes and reductions in government spending were widely trailed and were, perhaps, not surprising, although we await the detail as to how departmental reductions in spending will be achieved.

"Equally, whilst the proposed ‘Bank Levy’ was also expected, of note was the exemption for small UK Banks. Arguably this recognizes the role that small banks and building societies play at the heart of the community and, generally, the low risk approach to banking that such institutions offer.

"The planned rise in VAT from 17.5 per cent to 20 per cent in January 2011 provides a real incentive for the owners of Small and Medium Sized Enterprises (SMEs) in the Isle of Man to bring forward the purchase of business critical assets such as plant, machinery, IT and vehicles in to 2010 in order to beat the rise.

"As a leading provider of Asset Finance in the Isle of Man the Conister Bank team are well placed to offer advice to business owners about the best way to finance such asset purchases."

He added: "Whilst projections for economic growth in the UK, now independently sourced by the Office for Budget Responsibility, have been reduced, they continue to map out a path to recovery in the UK. As the UK is a major trading partner for the Isle of Man, this further reinforces our view that the diverse and flexible nature of the economy in the Isle of Man will continue to present opportunities for well managed local businesses to grow."