Treasury Minister Update

Further update on IOM Government support initiatives

Many of you in business (either as an owner or employee) have contacted us for information on the various Government support packages in light of the COVID19 outbreak. Please note that the main reference points (these are changing by the day) for these schemes are the following Isle of Man Government websites:

https://www.iomdfenterprise.im/coronavirus

https://covid19.gov.im/businesses/funding-support/

On Monday 6 April The Treasury Minister released the following statement which indicates that the main focus of interest, the wages support scheme, the details/application form for this will not be revealed until after Easter. Whilst this is very frustrating for those affected as it relates to wages going back to 1 March, the Treasury is at pains to point out it is working flat out to put the scheme in place.

This is what the Treasury Minister said on Monday:

Good afternoon

Over the last three weeks I have told you what direct and indirect financial measures have been put in place to help you through this Coronavirus pandemic.

It is clear from the response that we have received that the effects of the pandemic and the Government actions have caused widespread disruption to the lives of the vast majority of you.

The financial disruption of course will vary from household to household and business to business but there cannot be many of you who are not concerned about what the future holds in store and are questioning when the economy will start moving again.

The Covid19 Benefit – the MERA for short – opened for business yesterday morning and as at this morning had received 1,143 applications for direct financial support. 

In addition, I can tell you that in the few weeks the numbers of people registered for job seekers allowance went up by 457 representing a significant increase on recent figures.

Some of you will be collecting welfare support for the first time, some of you will be facing serious and significant drops in your income and for all of you this must be a massive shock and a time of worry and uncertainty.

We are doing our best to process your applications as fast as possible. 

Many of you may, through your businesses be kept in your roles through our wage support scheme. 

This scheme will be available for online registration shortly after the Easter weekend and we will start to meet the wage support requirements as soon as possible thereafter.

The Coronavirus business support scheme has to date received 2,327 applications.  We have already paid out over £1m to qualifying businesses and expect to continue to receive applications. 

We are working as fast as possible to process these claims and to get the payments to qualifying businesses as soon as we can.

However, I understand that there has been some element of confusion, delay and misunderstanding with the processing in some areas.

We are working closely with the Department for Enterprise to try and overcome these issues and bring clarity to the process.

Please understand that whilst we have to get money to you, we still have a responsibility to the taxpayer in general to try and ensure that public funds are being distributed appropriately and that some legitimacy is being applied in terms of verifying a business and an individual’s status.

This applies equally across all our schemes and unfortunately I must warn the minority that we are and we will undertake both pro-active and re-active compliance activity in order to verify the validity of claims.  We will seek the firmest of actions against anybody who has deliberately set out to seek the misappropriation of public funds.

Many of you have written to me to tell me how badly your business finances have been affected and how worried you are. 

I know that the amounts on offer will only provide the bare minimum of support and therefore it is vital that you use the full range of your skills and initiative to find a way for your businesses to survive the next few weeks and maybe beyond.

I have made clear to you that you will find a listening ear across Government in both Tax and National Insurance and Customs and Excise.  If you need to defer your statutory payments to aid cash flow then please call.

But it is only by utilising the full range of options open to you and by that I include your banks, your employees and Government schemes are you likely to find the optimum way through these difficult weeks.

I can also report a growing postbag that seeks more widespread support into sector’s that we may have initially excluded. 

I want you to know that our sector by sector approach has been undertaken with the protection of public funds in mind.

We can and we will continue to consider whether the schemes need to be broadened but I also want to reiterate that guidance will shortly be available to allow any business to write to the Chief Financial Officer explaining why assistance is required and how it will sustain jobs.

There will be a specific procedure to do so which will be available after shortly after Easter.

I know this approach may be frustrating to some but a full and complete utilisation of our financial resources at this point will leave us in a more difficult position when it comes to managing our exit and recovery from this significant shock to our economic system. 

The overall cost of the financial support packages are substantial but so is the loss of revenue and income that we are facing. 

So we must recognise that whilst this is difficult, whilst some may feel frustrated, we must nevertheless be responsible with our public finances.  We must be mindful of the future. 

If we expend too much now then we will be in a more difficult position when it comes to managing our exit and recovery from this pandemic.

It is vital that we have the financial ability to get back up and running.  Some of you will recover much more quickly than others, some of you may struggle and some may fail but we must remain optimistic that many of our core businesses and industries will remain in good shape.  We need to be ready to focus on and invest in our core sectors, to seek new opportunities and possibly to reshape our economy and we need the financial assets to do that.   

I have mentioned exit and recovery and these are becoming increasingly important words.  Our focus of course is the protection of life but I want you to know that we are working closely with the medical advisers as to how, when the time is right, we might effect a controlled return to work and what measures should be in place to manage the health risks should these still be present.

I want you to know that we have a first class team of medical officers advising us.

But the truth is right now that it is still too early to say how and when we can bring into effect a safe return to work. 

But I do know this that every second every minute, every hour and every day that we stay at home, the closer we get to returning to a semblance of normality. 

Going out risks your health your job and our economic future.

I cannot over emphasise that the success of the measures in place to protect the health of the nation are also equally as important for our economic recovery.  The sooner we can control this virus the sooner we can return to work and some normality. 

You all have your part to play in this. This is and must be a national effort.

The coming days are vital and we need to dig deep into our innermost resolve – The challenge is to eradicate Coronavirus on the Isle of Man – we can and we should believe this is possible.”

On a more positive note the following schemes are live:

  1. Manx Employment Replacement Allowance
  2. The Business Support Scheme
  3. The Strategic Capacity Scheme (tourist accommodation)
  4. VAT deferment initiative
  5. Isle of Man Disruption Loan Guarantee Scheme
  6. Coronavirus Business Adaptation Scheme

Finally, although not well publicised, businesses can contact the Income Tax Division at incometax@itd.treasury.gov.im or phone 685400) about deferring payroll taxes and national insurance. This generally relates to period 12 for 2019/20 and periods 1 and 2 of 2020/21.

As always, stay safe and keep in touch. If you would like to talk to a member of our team contact us at email@hardinglewis.com.

Disclaimer: Please do not take action based on the contents of this email without seeking advice. The contents highlight certain news items only. Harding Lewis Limited accept no responsibility for any action taken by anyone as a result of reading the above.