Thursday, October 15, 2009

The times they are a changin'

A Dept of Health and Social Security report into the ending of the reciprocal health agreement with the UK – which will go before Tynwald this month – says we're on our own after the current arrangement ends on April 1 next year. The report recommends that it will be entirely the responsibility of Manx residents to pay National Health Service charges for ongoing treatment if they fall ill or have an accident while visiting the UK. Isle of Man residents will have to pay NHS charges personally or ensure they have taken out travel insurance.

The ending of the agreement will also affect visitors to the Isle of Man, including TT racegoers, who will have to pay if they require ongoing hospital treatment at Noble's. Initial ER treatment will remain free, as will treatment for patients referred to UK hospitals by the Island's NHS. Anyone who has paid 10 years of national insurance contributions in the UK is covered, as are students studying in the UK.

The DHSS report notes that the recovery of funds from patients is expected to fall below the contribution – of around £3 million – currently given by the UK for the treatment of visitors to the Island. There is concern about the impact of the withdrawal of the agreement on older people with pre-existing medical problems – believing that they will have difficulty obtaining travel insurance.

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The UK government is to review its Value Added Tax sharing agreement with the Isle of Man, which currently accounts for over half of our government's income.

It is feared that between £50 million and £100 million of government revenue per year could be in jeopardy under any move to tighten the revenue sharing arrangements under the Customs agreement between the two countries.

The Manx Government's current net revenue spending is £572 million.

With the UK public finances deteriorating rapidly, Gordon Brown's administration is anxious to find new sources of tax revenue. It is understood that one area coming under pressure from the UK is the Customs agreement with the Island, which currently provides more than half — over £300 million — of the Manx Government's income.

Under the terms of the deal, the UK could give two years' notice to terminate the agreement.

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