Isle of Man Chamber of Commerce is calling on the Manx government to take urgent action to protect the future of the Island’s hospitality industry.
The Island’s biggest business network – which represents firms employing around 22,000 people in total and has members within the hospitality sector – is calling for urgent dialogue between businesses, trade associations and government so that measures can be put in place to prevent further business closures and support long-term growth.
The move comes after several businesses have closed in recent months, and more are reporting to be struggling due to severe financial pressures.
It also follows an emergency ‘call to arms’ meeting on April 18th at the Creg Ny Baa attended by members of the Licensed Victuallers’ Association, Isle of Man Restaurateurs’ Association, and the wider hospitality sector.
Chamber President Kristan McDonald commented: “Vibrant and sustainable hospitality and small business sectors are vital to the Island’s future prosperity. Not only are they the lifeblood of the local economy in terms of jobs, tax revenue and the role they play in the visitor economy, but they’re also an integral part of the fabric of the community and contribute massively to the quality of life we enjoy. Crucially, they also help to create the lifestyle ecosystem we can offer to everyone who we want to come to live and work here. The VAT rate, bureaucracy and government policies that affect small businesses are clearly having a detrimental impact. That’s why Isle of Man Chamber of Commerce supports the concerns raised by the LVA and Restaurateurs’ Association. As Chamber is also a representative organisation, it’s clear that there is a strong consensus building in the business community about the need for urgent action. While the focus is on hospitality because the current pressures are felt most acutely by businesses in this sector, similar issues are affecting all small businesses.”
The current 20% VAT rate, says Chamber, places a significant strain on the hospitality and other sectors by impacting competitiveness and limiting growth. The business networks adds that there are a growing number of reports that interaction with the VAT office is proving increasingly difficult for many. Chamber strongly believes that alternative solutions need to be considered in order to offset this and other impacts.
One option which Chamber says should be on the table to address staffing shortages is offering workers tax breaks if they take up a second job, or even zero income tax for the second job as an incentive to take on multiple roles. However, the business network says that these issues are not the only factors affecting small businesses.
Kristan McDonald added: “Poor weather, an early Easter break – and the 2% increase in income tax announced in the Budget which also moves many lower earners into the top tax band – are all contributory factors which are creating a perfect storm. Time is running out for many businesses with the pressure mounting day by day. It’s time for the government to accept the seriousness of the situation and take steps to protect the sector before we lose EVEN more small businesses.”
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