Mercenary Posted June 6, 2022 Share Posted June 6, 2022 3 minutes ago, Gladys said: Because we get the benefit of the VAT? The promoter would not see any difference, unless there is some government involvement proposed Quote Link to comment Share on other sites More sharing options...
Gladys Posted June 6, 2022 Share Posted June 6, 2022 2 minutes ago, Mercenary said: The promoter would not see any difference, unless there is some government involvement proposed The licence? Quote Link to comment Share on other sites More sharing options...
NoTail Posted June 6, 2022 Share Posted June 6, 2022 2 minutes ago, Mercenary said: The promoter would not see any difference, unless there is some government involvement proposed Not too bright tonight are you? The government gives the licence. To get the gas the developer needs to give incentives to get the licence. Quote Link to comment Share on other sites More sharing options...
Declan Posted June 6, 2022 Share Posted June 6, 2022 4 minutes ago, Gladys said: Because we get the benefit of the VAT? How does that work, I thought our share was the equivalent of Manx consumer spend? Can the UK rewrite the Common Purse agreement? Quote Link to comment Share on other sites More sharing options...
Declan Posted June 6, 2022 Share Posted June 6, 2022 6 minutes ago, Mercenary said: The promoter would not see any difference, unless there is some government involvement proposed The proposition seems to be in return for the licence to extract the IOM gets cheap consumer gas and the VAT on gas processed on-shore here. Quote Link to comment Share on other sites More sharing options...
0bserver Posted June 6, 2022 Share Posted June 6, 2022 28 minutes ago, Mercenary said: If there's no IOMG financing why would they care where VAT is applied? Presumably it would just be on where is more economical. Because it would make the IOM Government more likely to grant them a lease on the seabed. Quote Link to comment Share on other sites More sharing options...
The Phantom Posted June 6, 2022 Share Posted June 6, 2022 23 minutes ago, Declan said: How does that work, I thought our share was the equivalent of Manx consumer spend? Can the UK rewrite the Common Purse agreement? The VAT we would get from the Gas would likely be worked out on the same % basis. If it went to the UK we wouldn't get any VAT back. I'm sure the UK Govt are keen to re-write the share agreement but not in our favour. Plus they can't even sort out the beaurocracy to rescue Ukrainians from a war zone, god knows what they would do or how long it would take to re-write the agreement. Quote Link to comment Share on other sites More sharing options...
0bserver Posted June 6, 2022 Share Posted June 6, 2022 23 minutes ago, Declan said: How does that work, I thought our share was the equivalent of Manx consumer spend? Can the UK rewrite the Common Purse agreement? There's also a part where we benefit from VAT on goods and services 'produced' on island. 28 minutes ago, Declan said: The proposition seems to be in return for the licence to extract the IOM gets cheap consumer gas and the VAT on gas processed on-shore here. They've quoted as saying they will sell to the IOM at 80p per therm for a set number of years. Quote Link to comment Share on other sites More sharing options...
John Wright Posted June 6, 2022 Share Posted June 6, 2022 1. The company drilling and extracting the gas may pay an upfront sum to obtain the licence to extract. That would go to IoMG and not be subject to common revenue sharing. UK don’t share their revenue from North Sea extraction with IoM. 2. The IoM could impose a per cubic foot royalty, or a hydrocarbon duty, or a special gas/petroleum ring fenced corporation tax on profits. That latter is what UK does, and now the windfall tax. In UK the ring fenced corporation tax started at 10%, then 20%, then 32%, then 30%, then 20% currently, over the last 20%. 3. There could be a negotiation in the licence grant to supply IoM MUA/MG at a discounted fixed price. That’s only beneficial if the wholesale price remains high. The UK wholesale price behaves oddly as we have a glut in summer and a shortage in winter. MUA are paying above UK wholesale at present because they’ve bought ahead. 4. I’d assume the gas would be treated before being pumped to UK or IRL. The gas we get is treated. I don’t think they’d want to mix treated and untreated in the same pipe. Any VAT would fall into the Revenue Sharing Agreement, wherever it’s collected/paid. However the gas extraction output might increase the Manx National Income and so increase the percentage of VAT we get. But the division is based on where consumption falls. So, not by much. FERSA explained, here https://www.gov.im/media/1370014/an-explanation-of-fersa.pdf 2 Quote Link to comment Share on other sites More sharing options...
John Wright Posted June 6, 2022 Share Posted June 6, 2022 1 minute ago, 0bserver said: There's also a part where we benefit from VAT on goods and services 'produced' on island. They've quoted as saying they will sell to the IOM at 80p per therm for a set number of years. It’s consumed, not produced. Quote Link to comment Share on other sites More sharing options...
0bserver Posted June 6, 2022 Share Posted June 6, 2022 (edited) 3 minutes ago, John Wright said: It’s consumed, not produced. We'll still have some kind of benefit from the sale of it surely? That will then be accounted for when they get the Skellynomics calculator out? Edited June 6, 2022 by 0bserver Quote Link to comment Share on other sites More sharing options...
John Wright Posted June 6, 2022 Share Posted June 6, 2022 1 minute ago, 0bserver said: We'll still have some kind of benefit from the sale of it surely? That will then be accounted for when they get the Skellynomics calculator out? See my post 2 up! 1 Quote Link to comment Share on other sites More sharing options...
GD4ELI Posted June 6, 2022 Share Posted June 6, 2022 12 minutes ago, The Phantom said: The VAT we would get from the Gas would likely be worked out on the same % basis. If it went to the UK we wouldn't get any VAT back. I'm sure the UK Govt are keen to re-write the share agreement but not in our favour. Plus they can't even sort out the beaurocracy to rescue Ukrainians from a war zone, god knows what they would do or how long it would take to re-write the agreement. Do you understand how VAT works? Quote Link to comment Share on other sites More sharing options...
0bserver Posted June 6, 2022 Share Posted June 6, 2022 2 minutes ago, John Wright said: See my post 2 up! Appreciated. Quote Link to comment Share on other sites More sharing options...
The Phantom Posted June 6, 2022 Share Posted June 6, 2022 16 minutes ago, GD4ELI said: Do you understand how VAT works? Basically yeah. Jaffa cakes aren't biscuits. But considering I've paid £1000s to VAT experts for advice to businesses in the past and there are people who devote their entire careers to unravelling that particular gordian knot, I suspect its not a simple as you suppose. But feel free to enlighten me. Quote Link to comment Share on other sites More sharing options...
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