‘Unrealistic and unfeasible’

Isle of Man accountants have slammed suggestions that the island may seek independence from the UK as ‘unrealistic’ and ‘unhelpful’.

Speaking in the wake of a debate on independence in the Manx parliament last week, Bruce Taylor, a partner in Deloitte & Touche’s Douglas office, said: ‘There is enough uncertainty without stirring up more.’

The British crown dependency is self-governing, but its external affairs are looked after by the UK. Uncertainty and fears over the effect European tax harmonisation will have on the island’s low-tax regime have fuelled calls for greater independence.

Taylor said: ‘The UK is a major trading partner, and the island has access to the EU via the UK. Independence is not economically feasible.’

He described those calling for independence as a ‘fringe minority’.

Following last week’s parliamentary debate, the island’s council of ministers agreed to prepare a report on how the island was dealing with the threat of EU and OECD moves to cut tax competition. They plan to present it in June.

Peter Pell-Hiley, KPMG’s managing partner on the island, said: ‘I think the island has a history of openness when it comes to discussing issues. I don’t think this will have any effect on the island’s attractiveness as a financial centre.’

He also referred to last year’s Edwards report, which looked at financial regulation on the Isle of Man and the Channel Islands.

‘The report has been fantastic for the island because it has been misunderstood, and it has been good to get the issues on the table,’ he argued.

Manx authorities have been keen to demonstrate the strength of their financial regulation and counter suggestions that the island is a centre for financial crime and money laundering.

New legislation was introduced last summer, which Manx authorities boast are the furthest reaching provisions against money laundering in the world.

Channel Island officials have also been cleaning up their act. Jersey has passed new anti-money-laundering legislation and last month announced proposals for improved investment business regulation.

Representatives from both the Isle of Man and the Channel Islands met UK Home Office officials last month for preliminary discussions on financial regulation and the Edwards report.

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