Phillip Dearden Posted June 6, 2022 Share Posted June 6, 2022 36 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. Are you sure? Quote Link to comment Share on other sites More sharing options...
b4mbi Posted June 6, 2022 Share Posted June 6, 2022 14 minutes ago, John Wright said: 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 The gas would be treated/cleaned of impurities here in a small cleaning plant close to where it lands, most probably somewhere on the north east coast, being the closest land point to the gas field. Much cheaper to create pipelines on/under land than at sea. The cleaned gas would then be fed into the existing interconnector at Glen Mooar for export. We are adding value to that extracted gas here by cleaning it and therefore VAT will be charged on sales of that gas, which our customs and excise will receive. My understanding is that IOMG effectively would keep all of that VAT and not have to share under FERSA, as hydrocarbons are excluded in the FERSA agreement as the VAT on them can be directly measured through quantities. Indeed, as JW states, we don't benefit from sharing the VAT on UK hyrdocarbon extraction, so why should UK benefit from ours? 1 4 Quote Link to comment Share on other sites More sharing options...
The Phantom Posted June 6, 2022 Share Posted June 6, 2022 1 minute ago, Phillip Dearden said: Are you sure? No, I'm not a VAT expert. But assuming the VAT the Govt will claim and we pay on the gas will be thrown into the common purse and worked out accordingly. Quote Link to comment Share on other sites More sharing options...
The Phantom Posted June 6, 2022 Share Posted June 6, 2022 4 minutes ago, Phillip Dearden said: Are you sure? 3 minutes ago, b4mbi said: My understanding is that IOMG effectively would keep all of that VAT and not have to share under FERSA, as hydrocarbons are excluded in the FERSA agreement as the VAT on them can be directly measured through quantities. Indeed, as JW states, we don't benefit from sharing the VAT on UK hyrdocarbon extraction, so why should UK benefit from ours? Oh there we go. Gas would be exempt from the agreement. See, complicated. Quote Link to comment Share on other sites More sharing options...
b4mbi Posted June 6, 2022 Share Posted June 6, 2022 (edited) 7 minutes ago, The Phantom said: Oh there we go. Gas would be exempt from the agreement. See, complicated. I think! I am no VAT expert.... 😄 However @Phillip Deardenformer accounting firm tax director maybe in a better position to advise.... Edited June 6, 2022 by b4mbi 1 1 Quote Link to comment Share on other sites More sharing options...
John Wright Posted June 6, 2022 Share Posted June 6, 2022 9 minutes ago, The Phantom said: Oh there we go. Gas would be exempt from the agreement. See, complicated. There’s no VAT arising in the IoM bringing it on shore or cleaning and processing, unless the extractor sells it to the processor. The VAT arises on sale to the gas company in either UK or IRL, and I’m not sure whether that’s when you put it into the pipe or when it comes out at the other end. 1 Quote Link to comment Share on other sites More sharing options...
John Wright Posted June 6, 2022 Share Posted June 6, 2022 1 hour ago, b4mbi said: The gas would be treated/cleaned of impurities here in a small cleaning plant close to where it lands, most probably somewhere on the north east coast, being the closest land point to the gas field. Much cheaper to create pipelines on/under land than at sea. The cleaned gas would then be fed into the existing interconnector at Glen Mooar for export. We are adding value to that extracted gas here by cleaning it and therefore VAT will be charged on sales of that gas, which our customs and excise will receive. My understanding is that IOMG effectively would keep all of that VAT and not have to share under FERSA, as hydrocarbons are excluded in the FERSA agreement as the VAT on them can be directly measured through quantities. Indeed, as JW states, we don't benefit from sharing the VAT on UK hyrdocarbon extraction, so why should UK benefit from ours? I think you are confusing Hydrocarbon Duty ( which isn’t shared ) and VAT on sale of hydrocarbons ( which is ). Quote Link to comment Share on other sites More sharing options...
b4mbi Posted June 6, 2022 Share Posted June 6, 2022 26 minutes ago, John Wright said: I think you are confusing Hydrocarbon Duty ( which isn’t shared ) and VAT on sale of hydrocarbons ( which is ). Ah yes, I think I may have. Apologies. So without seeing the FERSA agreement itself (what was linked was a guide) we can't judge the effect collection on the IOM of VAT from hydrocarbon sales (to Ireland? To UK?) will have on the calculations of how much VAT the island actually receives. Quote Link to comment Share on other sites More sharing options...
Gladys Posted July 20, 2022 Share Posted July 20, 2022 So, that's the end of that then. 1 Quote Link to comment Share on other sites More sharing options...
John Wright Posted July 20, 2022 Share Posted July 20, 2022 9 minutes ago, Gladys said: So, that's the end of that then. No. It doesn’t affect the one existing licence issued. 1 Quote Link to comment Share on other sites More sharing options...
forestboy Posted July 20, 2022 Share Posted July 20, 2022 Short sighted politicians yet again. 1 Quote Link to comment Share on other sites More sharing options...
John Wright Posted July 20, 2022 Share Posted July 20, 2022 On 6/6/2022 at 8:46 PM, b4mbi said: Ah yes, I think I may have. Apologies. So without seeing the FERSA agreement itself (what was linked was a guide) we can't judge the effect collection on the IOM of VAT from hydrocarbon sales (to Ireland? To UK?) will have on the calculations of how much VAT the island actually receives. I missed this 6 weeks ago. Any VAT charged would go into the notional joint pot to be divvied out according to national income under FERSA. So it’s neutral if subject to VAT in IoM when it goes into the pipeline and if it’s VAT charged when it comes out of the pipe in Ireland then it won’t go into the pot. Thats because there is no VAT on exports of goods from UK/IoM. The recipient accounts for VAT in the country of import as a self charge. So it doesn’t get into the pot. It goes to the Irish tax man. I think the no VAT situation applies, and therefore it has no effect on VAT, if the sale is to Ireland. Its not a FERSA matter. Quote Link to comment Share on other sites More sharing options...
Gladys Posted July 20, 2022 Share Posted July 20, 2022 17 minutes ago, John Wright said: No. It doesn’t affect the one existing licence issued. No, but according to the MR report there will be no further licences issued. This one won't be revoked, but if there is no extraction licence, what's the point in exploring? I do hope I heard wrong. Quote Link to comment Share on other sites More sharing options...
ian rush Posted July 20, 2022 Share Posted July 20, 2022 I’m pleased the politicians have done this. Hopefully the shit show that is Crogga comes to nothing as well. If there was anything there don’t you think a big player would’ve been in first or taken an option from Crogga by now? As it is they’re drumming up small stakes investment and leaning on Government for extension after extension. 2 Quote Link to comment Share on other sites More sharing options...
Omobono Posted July 20, 2022 Share Posted July 20, 2022 I just hope they will be able to fully explore the proposed gas field , and at no cost to the taxpayer , and if there is a substantial amount of gas there ,be permitted to extract it , if the Russians pull the rug on the germans this autumn any gas deposits will become extremely valuable ,and it would be extremely foolish for the isle of man government to deprive the market place of an opportunity to have access to this ,which could prove to be very beneficial in making the transitional change away from fossil fuels ,which will not happen overnight and could take years , just hope IOM PLC has not bottled out ! or filled its trousers 1 7 Quote Link to comment Share on other sites More sharing options...
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