The Isle of Man will lose its competitive edge unless the Manx government brings the audit threshold in line with that seen in the United Kingdom, the Association of Corporate Service Providers has warned.
Currently, companies operating in the UK do not face compulsory audits unless their turnover exceeds £5.6 million. However, in the Isle of Man, the audit threshold is set at £45,000, a level that Michael Shimmin, the chairman of the ACSP, thinks is far too low, representing an unnecessary burden on the Island's businesses.
"We are supportive of the Island being a well-regulated jurisdiction, but making it more difficult and more expensive for people to do business doesn't make any sense," Mr Shimmin stated, according to a report by the Isle of Man Online.
The Manx Treasury is currently working through consultation proposals regarding this issue, and is said to be considering an increase in the threshold, but not as far as the UK threshold.
"If the UK finds £5.6m acceptable we should say the same, particularly as a number of our companies are not actually trading companies, but property or investment holding entities," Mr Shimmin argued.
The Manx Treasury is shortly expected to issue a public response to the consultation findings.
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