TAX CREDITS PROPOSAL SENT TO TREASURY MINISTER BELL-NO REPLY
also proposals for the Manx Taxation Strategy for the Period 2007-2012
Dear Mr Bell,
With the recent introduction of Personal Allowance Tax
Credits, it appears to IOMPA (Isle of Man Pensioners' Association) that the
Manx income tax system is now being used not only to tax Employment Income
etc., in a traditional and progressive manner, but to actively intervene in the
redistribution of income for categories of individuals deemed disadvantaged.
Effectively, the tax regime is giving cash gifts to those individuals it deems
financially disadvantaged - currently defined as not having annual declarable
gross earnings of £8,670 or over irrespective of their personal background
circumstances.
You may know that various IOMPA members consider they are also a financially
disadvantaged category of Manx society.
Despite paying the same NI contributions throughout their working life, many
are excluded from receiving the Manx Pension Supplement. This amounts to a
financial disadvantage of £2269.80 per annum per pensioner.
Given the new pro-active approach to Island taxation, IOMPA request that the
disadvantaged position of pensioners disqualified from receiving the Manx
Pension Supplement is recognised by a specific tax concession.
IoM Tax Assessor has been consulted as to feasibility and sees no technical
problem with implementing IOMPA's suggestion.
Our intention would be that you issue a "Manx Pension Supplement
Ineligibility Tax Credit" to trigger a cash gift equivalent to the tax due
on the Manx Supplement.
IOMPA is aware that this current request is far short of awarding our members
equal treatment and a minor cost in comparison to awarding the full Manx
Supplement. However, members do consider it would go a small way towards
demonstrating some sympathy for their plight. We believe this would be a most
welcome development as far as the disadvantaged pensioners and second class
citizens are concerned. It would go a little way at least to reduce the
disparity between the financial position of those in receipt of the Manx
Pension Supplement and those denied it, despite IOMPA members offering to pay
Class 3 National Insurance Contributions and being denied the opportunity by
DHSS Minister Teare.
IOMPA believe that the introduction of such a tax concession would mirror the
thinking behind the Personal Allowance Tax Credit and be a logical extension of
that thinking.
This issue will be published on the IOMPA Web Site in the near future.
Paul Chambers
Chairman
Isle of Man Pensioners' Association
The above email was sent to Treasury Minister Bell on 1st May, 2008, a tick receipt was received the same day. Since then there has been no further communication from Treasury Minister Bell in respect of the Tax Credit Proposal.
On the 3rd June, 2008, the following email was sent by
IOMPA to the IOM Treasury.
Dear
'Proposals for the Manx Taxation Strategy for the Period 2007-2012'.
I have now received instructions from my members.
The issues that they identified as being of interest are as follows.
1) The Tax Credits document that I have already sent to you, Mr Crouch (Inland
Revenue) and Treasury Minister Bell-who has still not replied, is seen above
entitled "Dear Mr Bell". This has now been published on our web site.
www.isleofmanpensioners.com
2) There was concern that the level of financial protection for Manx Residents
investing in financial products on the Island falls far below that offered in
the UK. The UK guarantees in the region of the first £35,000 invested
whilst the IOM Government is paltry in comparison, around £17,000.
3) The UK also encourages investors of certain financial products by giving a
tax free 5% annual return in the form of "return of capital".
4) At a time of severe financial hardship for those not in receipt of the
Pension Supplement, the State Retirement Pension of those disadvantaged and
second class citizens of the Isle of Man should be tax free.
5) Likewise at a time of severe financial hardship for those not in receipt of
the Pension Supplement, those disadvantaged and second class citizens of the
Isle of Man should also be able to invest in tax free saving schemes. Clearly
if DHSS Minister Teare had accepted IOMPA's recent proposal to be able to pay
Class 3 N.I. contributions the financial plight of my members would have been
lessened.
Regards
Paul Chambers
Chairman
Isle of Man Pensioners' Association