Recent and proposed changes to taxation and their impact on Island businesses provided the focus for PwC Isle of Man’s annual tax conference.

The breakfast event at The Sefton on April 27 saw more than 100 industry delegates hear presentations from Tax Partner Kevin Cowley, Tax Director Andrew Cardwell, Senior Associate Robyn Brewster, Senior VAT Manager Phil Morris, and guest speaker Charles Coue, Collector of Customs and Excise.

In his opening introduction, Kevin gave an overview of the current economic climate and explained that tax is at the top of the international agenda.

Charles spoke about the journey of the VAT revenue sharing agreement between the Isle of Man and the UK, saying that FERSA (Final Expenditure Revenue Sharing Arrangement) is the most accurate method to date. He explained that it can capture VAT on all Isle of Man spending – on and off-Island, and via the internet – and requires an income and expenditure survey every five years, with Charles calling for industry support on ways to improve the survey to make sure all relevant spending is properly captured.

In his main address, Kevin outlined the UK Budget, which saw the UK compete on tax issues, including ‘tough’ measures aimed at disguised remuneration.

Andrew covered recent developments with non-UK domiciliaries, including residential property & inheritance tax, and deemed domicile status. In particular, he looked at changes to UK inheritance tax scheduled for April 2017 which will impact the way many non-domiciliaries in the UK hold residential property assets.

Robyn focused on the OECD’s BEPS (Base Erosion and Profit Shifting) project, which seeks to ensure that business profits are taxed where they are generated, and two key themes of which are substance and transparency – where people are employed, where sales are made, and where customers live. Robyn outlined the opportunity this brings the Island and reinforces what a superb place it is to do business. However, she stressed there was much more work to do to, particularly as each country starts to implement the BEPS requirements.

The briefing ended with an update on VAT and information reporting from Phil. He discussed the future of VAT, including changes that will impact the scope of the VAT exemption for insurance intermediary services. He explained that CRS (Common Reporting Standards) is a game changer, with more than 100 countries implementing the reporting, before urging businesses to be prepared and encourage testing to identify errors at an early stage.

‘The conference was a fantastic opportunity to reflect on recent tax developments and what their impact will be on the Island,’ said Kevin. ‘We use this event to provide clear insight and advice for our clients and local industry into the main business issues of the day; something we strive to do year-on-year.’