Isle of Man Revenue Sharing Agreements

<<FOI 2483-09 Mr Williams - Acknowledgement Letter.pdf>>

Message sent on behalf of Freedom of Information Team

The information in this e-mail and any attachments is confidential and may
be subject to legal professional privilege. Unless you are the intended
recipient or his/her representative you are not authorised to, and must
not, read, copy, distribute, use or retain this message or any part of it.
If you are not the intended recipient, please notify the sender
immediately.

HM Revenue & Customs computer systems will be monitored and communications
carried on them recorded, to secure the effective operation of the system
and for lawful purposes.

The Commissioners for HM Revenue and Customs are not liable for any
personal views of the sender.

This e-mail may have been intercepted and its information altered.

show quoted sections

Communications via the GSi may be automatically logged, monitored and/or
recorded for legal purposes.

Dear Mr Williams

In response to your Freedom of Information request dated 27 November 2009
in which you asked for details of the methods used, from 1997 until now,
to calculate relative shares of the common duties to be paid to the Isle
of Man Treasury in accordance with Section 2(2) of the Isle of Man Act
1979 and the 1979 UK/IOM Customs and Excise Agreement.

Please find attached a copy of:

(a) the current HM Treasury Direction:

<<newTD.TIF>>

We have been unable to locate a copy of the preceding 1996 HM Treasury
Direction, but we understand that it's content is very similar.

(b) the administrative `Modernisation Note' which covers the 2007/8
financial year:

<<070712 IOM Revenue Sharing Agreement Standalone Document (scanned).tif>>

(c ) the revised administrative `Modernisation Note' which covers the
2008/9 and 2009/10 financial years:

<<h4p09200.pdf>>

(d) a second revision of the administrative `Modernisation Note' which
will come into force from the beginning of the 2010 financial year:

<<image20091109_1227120001.pdf>>

The above documents contain worked examples of the revenue sharing
calculation using illustrative figures.

Prior to 2007 the joint UK/IOM duties and indirect taxes were shared on
the basis of the goods and services `consumed' in each jurisdiction,
excluding any consumption attributable to a specified group of IOM `own
trade' sectors (eg the tourist industry and financial services). To
determine `consumption' on the Island, the IOM Customs & Excise
administration collected detailed statistics on the Island's population,
the number of visitors, as well as certain types of goods and services
supplied by local businesses. However, as it was becoming increasingly
costly and difficult to collect this information, in 2006 the two
administrations jointly agreed to modernise and simplify the revenue
sharing arrangements as set out in the `Modernisation Note'.

There is no single administrative document which states how these pre-2007
revenue sharing arrangements operated, but the key calculations were
summarised in the annual HMRC `IOM Account'. So that you can see how these
earlier arrangements functioned, I have attached a copy of the audited
2006-7 IOM Account.

<<IoM Account 06-07 certified.pdf>>

Yours sincerely

Andrew Webb

VAT International

HM Revenue & Customs

show quoted sections