The Isle of Man Licensed Victualler’s Association (LVA) held a highly attended meeting last night (April 18) to discuss the issues facing the hospitality sector.
More than 100 business owners and operators attended the meeting, with apologies from over 50 additional businesses.
On the back of the meeting the LVA have issued a statement, and highlighted its concerns with the rate of VAT and minimum wage legislation among other issues.
The full statement is below:
‘We speak not only for Small and Medium Enterprises (SMEs) within our sector but also for all small companies in our community grappling with the expenses of operating on the Isle of Man.
Our Association and allied traders refuse to remain passive observers as our friends and families struggle or close their businesses while the Isle of Man government mismanages the funds we and other small Manx businesses contribute to our economy.
We urge the Chief Minister, Treasury Minister, Enterprise Minister, and top Civil Servants in the Island’s Financial Departments to listen attentively. Our businesses are suffering, alongside our families and customers. It’s time for the government to address our Island’s issues.
It’s imperative that the government heed the expertise of those within the industry. Instead of implementing ineffective schemes with exorbitant costs, they must address our genuine needs and those of our workforce.
Firstly, VAT is crippling our businesses, with 20% of every meal, sandwich, coffee, or pint going straight to government coffers. We reject the notion that the Island’s government cannot amend our VAT system when our fellow Crown Dependencies have zero or 5% sales tax rates. We don’t want to take government money, we want to keep more of what we have earned.
Secondly, the Isle of Man government has exploited its Minimum Wage legislation, disregarding the plight of lower-paid individuals. They have disproportionately burdened our lower-paid workers, it is unacceptable that someone earning the proposed Minimum Wage of £11.45 per hour would be taxed at the new highest rate of 22%.
Over the past six years, the standard tax rate has risen by just £500. Much of the wage increases end up flowing back to the government rather than staying in the public’s pocket to support spending in the economy and cope with the cost-of-living challenges.
We demand immediate adjustments to tax thresholds, aligning them with the Living Wage to ensure those earning at this level remain within the 10% Tax band.
National Insurance stands as a punitive tax on employment, stifling both employers and employees. Threshold adjustments are overdue, people are not being rewarded for taking on more work, the burden of low NI and Tax allowances is a major cause of the staffing problems the Isle of Man faces.
Aligning minimum wage age categories with those in the UK would alleviate employment and training issues, it is difficult to take the risk to recruit, train and develop younger staff, with the current system. Good employees will earn better wages through their own endeavours.
In the Licensing Industry, recent legislation has increased regulatory and training burdens on employers. Government support through schemes like VTAS should be streamlined and easily accessible to ensure compliance without unnecessary complexity and time-consuming interface with bureaucrats. We are small business owners, and our focus should be our customers, employees and suppliers.
The Isle of Man government holds the power to reduce Beer Excise Duty on locally brewed beers, providing immediate relief from rising costs for businesses and consumers alike.
Access to government grant and loan schemes has become overly complex or inaccessible for struggling businesses. We call for an overhaul of support available to small businesses, with a focus on aiding established businesses with improvements and green economy initiatives. To not only support export businesses but to support the ones here trying to operate within our community.
Energy costs remain a significant obstacle, necessitating the creation of reduced electricity tariffs and specialised pricing for heavy users in gas and heating fuels in business areas where consumption reduction is unfeasible.
Despite the challenges, our industry comprises resilient entrepreneurs deeply invested in serving our Island. We have long been significant contributors to government revenue, often remaining silent. However, we refuse to tolerate the government’s disregard for the public purse and our businesses, staff, and families while they mismanage funds and disregard calls for change from Manx families.
On behalf of all who gave up their valuable time yesterday to consider all the challenges we face, we express deep disappointment in the closed-minded and inaccurate remarks made by the DfE Minister to the media today, without even hearing our feedback.
A further demonstration of a growing pattern of disregard for the concerns of our industry and the broader public, whose understanding and support for the islands small locally owned businesses is growing.‘
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