In 1979, the United Kingdom (UK) and Isle of Man (IOM) Governments agreed that the UK and the IOM should be treated as a single tax area for VAT. Working with the UK tax authorities, the IOM operates its own tax office for VAT and other indirect taxes. The IOM has, independently of the UK, developed an efficient VAT application and de-registration processes. This streamlined approach reduces clients’ exposure to market price fluctuations while awaiting VAT registration (1-2 weeks in the IOM compared to 3-4 months in the UK). A further key benefit of the IOM is that in certain scenarios there is a substantial cash flow advantage for clients, as VAT payments are not required upfront – they’re treated as paper transactions.
Time: 1-2 weeks in the IOM compared to 3-4 months in the UK
Cost: A streamlined approach reducing clients’ exposure to market price fluctuations while awaiting VAT registration
Expertise: With numerous years of experience dealing with VAT regulations, IQ-EQ can help navigate any complexities or issues
Local VAT authority: The IOM operates its own tax authority for VAT which works in conjunction with the UK
Real estate
- Setting up special purpose vehicles (SPVs) to hold such assets under funds or for private and commercial clients to register for VAT in the UK
- Registering foreign companies for VAT in the UK (including VAT groups and opting to tax) can often take between three and six weeks. Registering an entity for VAT in IOM (including a VAT group and option to tax) will normally take up to 7 days to process
- In-house accounting expertise includes the ability to do VAT and corporation tax returns, which often have to be outsourced in other jurisdictions
- The Isle of Man offers a simple and advantageous tax regime (0% standard rate of corporate income tax for certain sectors)
