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Isle Of Man Government Accounts Show Revenue Surplus

by Jason Gorringe, Tax-News.com, London

21 May 2007


The Isle of Man government's accounts for the year to March 31, 2007, show that the Treasury has a revenue surplus to the tune of GBP78 million.

Treasury income has significantly exceeded estimates for the year, predominantly due to Customs receipts. The agreement reached with the United Kingdom in respect of sharing Customs revenue is expected to reduce the volatility of Customs receipts in the future and the estimate for 2007-08 is GBP421m, or GBP17m lower than actual receipts for 2006-07.

However, Departments’ net expenditure also exceeded the amount shown in the 2006-07 Budget, mainly as a result of public sector employees’ pay awards. Treasury has taken the opportunity presented as a result of the net surplus for the year, to transfer significant additional amounts to various Government reserves and funds in order to meet expected requirements in future years, such as pensions obligations.

Gross income from all sources at GBP868.0m (2006 : GBP776.3m) was generally in line with the various estimates for Departments and Other Bodies but in aggregate exceeded them by GBP91.0m, mainly due to Customs receipts (GBP65.6m higher than estimate). Within that, Treasury income at GBP606.4m (2006 : GBP536.6m) exceeded the estimate by GBP76.0 million, again largely due to the Customs receipts. The total amount of Income Tax collected was higher than the previous year for the first time in four years.

Net expenditure at GBP528.2m (2006 : GBP512.6m) was GBP4.7m less than the revised estimate (the original estimate of GBP522.1m plus the Supplementary Revenue Votes of GBP10.8m). GBP7.7m of those Revenue Supplementary Votes were for pay awards and the next largest single vote was GBP2.9m for DHSS Reciprocal Healthcare Agreement with the United Kingdom. Expenditure under most heads was close to or within the approved Votes, although the Department of Health and Social Security will require a further Supplementary Vote of GBP1.7m in addition to those obtained during the year.

Treasury's investment strategies for the larger funds which are externally invested include exposure to equities and although their market values have fluctuated downwards from time to time, the broad and long term trend has been upwards. In 2006-07 the stated market value of the investments (net of transfers into and out of the funds) rose by GBP189.2m (13.7% increase, net of transfers).

The value of internal investments rose by GBP68.4m (net of expenditure), as a result of the contributions, rolled up investment and other income exceeding the expenditure of the funds on items such as the E-Commerce Fund (GBP3.2m), the Housing Reserve Fund (GBP7.8m), the internal invested portion of the Public Sector Employees’ Pension Reserve (GBP13.9m) and the Media Development Fund (GBP35.9m).


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