Beneficial ownership registers in focus, Brexit impacts online gambling and Guernsey looks to Nepal

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Isle of Man

Unemployment in the Isle of Man dropped 0.1% to 0.8% during March with 349 islanders looking for work. At 2.9% and 5.2% the SW of England and Yorkshire & Humberside had the lowest and highest unemployment rate in the UK respectively. The UK unemployment rate stands at 3.9%.

Average earnings in the Isle of Man are £573 per week. London had the highest average earnings of £846 whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation. The Isle of Man’s average property price is £253,000.

A proposed amendment to a UK bill – resisted by the Isle of Man Government – on financial services which would have obliged the Crown dependencies to create public beneficial ownership registers by 2020 was dropped this month. The Isle of Man introduced a private beneficial ownership register for companies in 2017; information from the register can be accessed if there is suspected money laundering or tax evasion within 24 hours. In the UK, information about who owns company assets can be accessed by anyone but only law enforcement and tax authorities can access the same information in the Isle of Man.

Forecasts that the Manx government’s pension reserve will be exhausted by 2021-22 initiated a government report which has recommended the creation of a voluntary defined contribution scheme for new starters. The new scheme aims to reduce the annual £45m pensions’ deficit; public sector pensions are unfunded on the Island.

On infrastructure, the new harbour bridge in Peel has been completed ahead of schedule. The 20 week project to replace the timber bridge – built in 1938 – with a concrete deck and steel beams cost c£400,000.

Island transport has been improved after Flybe announced daily flights between the Isle of Man and London Heathrow from 21 April using a 78-seat Bombardier Q400 aircraft; Flybe will operate flights to five destinations from the island this summer.

On the seas, a new 25-year deal between the government and the Isle of Man Steam Packet Company will see foot passenger fares frozen until 2021, more special offer fares introduced, higher winter weekend fares scrapped; and children under 16 and full-time students will travel for half-price. An extra weekly sailing to Liverpool will be added and the plan caters for a replacement vessel for the Ben-my-Chree by the end of 2021 plus a £250,000 refurbishment of the fast craft Manannan. The company – which sails between Douglas and five ports in the UK and Ireland – became state owned in May 2018 but is being operated at arm’s length. The Manannan has resumed daily sailings to Liverpool for the summer.

High profile island finance company Canaccord Genuity Wealth Management will acquire Thomas Miller Wealth Management Limited in a £28m three year deal. Client assets of Thomas Miller and the private client investment management business in the Isle of Man total c£1bn and generated revenue of c£8.4m last year. The deal is subject to regulatory approval.

Gibraltar

Unemployment in Gibraltar is 1.0% with 44 Rock inhabitants looking for work. At 2.9% and 5.2% the SW of England and Yorkshire & Humberside had the lowest and highest unemployment rate in the UK respectively. The UK unemployment rate stands at 3.9%.

Average earnings in Gibraltar are c£569 per week. London had the highest average earnings of £846 whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation. Gibraltar’s average property price is c£620,000.

Gibraltar, the UK and Spain have finalised the terms of a tax treaty that forms part of the package of Brexit agreements relating to the Rock. The treaty should enable the resolution of disputes concerning the tax residence of companies and individuals based in Gibraltar and Spain. Also on Brexit, Spain will continue to accept existing driving licences issued in the UK and Gibraltar for a period of nine months after the Brexit date and UK / Gibraltar flights will continue to be able to fly over the EU even in the event of a no deal.

A petition with over 14,000 signatures – calling for Gibraltar to have its own Westminster MP – has been delivered to the House of Commons and Downing Street.

On development, a 21-storey building at 92 Devils Tower Road has received full planning permission after the Government asked the developer to reduce the building height. Also the Ministry of Defence will further invest in facilities to accommodate the Royal Navy’s aircraft carriers at Gibraltar’s Naval Base. HMS Queen Elizabeth is currently berthed at the port but the MOD would like the option to berth HMS Prince of Wales – commissioned in 2020 – at the same time.

The sports betting and gaming group, GVC, is set to relocate its internet gambling servers to Ireland ahead of Brexit, but it will continue to headquarter its online businesses in Gibraltar. There is a legal and regulatory requirement for companies providing gambling to EU customers to be established and licensed in an EU member state. Some EU countries also require the servers hosting online gambling platforms to be located in a member state so the firm will operate under Maltese licences with servers located in Ireland. The change is not likely to have a significant impact on the headcount in Gibraltar. Likewise Lottoland – the lottery betting operator – has been awarded two gaming licences by the Malta Gaming Authority but the firm has no plans to move from Gibraltar.
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Channel Islands

Unemployment in the Channel Islands is low, sub c2% with c1100 islanders looking for work. At 2.9% and 5.2% the SW of England and Yorkshire & Humberside respectively had the lowest and highest unemployment rate in the UK. The UK unemployment rate stands at 3.9%.

Average earnings in the Channel Islands are c£700 per week. London had the highest average earnings of £846 whereas the North East had the lowest of £523. In the UK average earnings grew by 3.4% or by 1.5% after inflation. The Channel Islands’s average property price is c£480,000.

A proposed amendment to a UK bill on financial services – which would have obliged the Crown dependencies to create public beneficial ownership registers by 2020 – was dropped this month; in the UK information about who owns company assets can be accessed by anyone. Both the Jersey and Guernsey governments say that the amendment would produce inoperable legislation and it is unconstitutional. Also on financial transparency, legal reforms introduced last year have meant that Jersey and Guernsey have been recognised as cooperative jurisdictions; avoiding the EU’s tax blacklists. The EU’s list of non-cooperative jurisdictions has grown and now includes countries like Barbados and the United Arab Emirates. The crown dependencies are not in the UK nor members of the EU but benefit from tariff-free trade under the UK’s 1972 accession treaty which will cease to apply when the UK leaves.

The Fiscal Policy Panel – economists who advise Jersey’s government – warns £340m was taken out of reserves over recent years to balance the budget. Taxes will need to rise or public sector spending cut if Jersey’s government is to run a balanced budget. Recently the UK government’s auditors have reviewed Jersey’s social security fund, concluding that Jersey needs to start paying more in social security; currently employees contribute 6% of salary and employers 6.5%; far lower than the UK rate. Alternatively the population could be allowed to grow at a rate of at least 700 people a year. On demographics, people who were born and raised in Alderney – or who have lived in the islands for eight consecutive years – may apply to live in Guernsey to work or study. Workers could come from Nepal after immigration rules were relaxed to allow 130 non-EU migrants to work in the island on a seasonal basis. Jersey farmers are struggling to find staff to gather in its famous potato crop blaming Brexit for making the island less attractive to EU workers. Nepalese workers could come to the island for up to nine months at a time as part of a two-year work permit trial scheme using the UK’s connections with Nepal through the Ghurkas.

On transport, Blue Islands airline has criticised rival Aurigny after Aurigny announced flights from Guernsey to Jersey and Southampton. Blue Islands claims it loses money on these routes and there is likely to be insufficient demand for both operators; Aurigny is also likely to face competition itself from Flybe on its Guernsey to Manchester route. Aurigny – which is States owned – also said it was disappointed not to win a contract to operate Alderney’s flights between Guernsey and Southampton after Guernsey’s Economic Development Committee thought the airline had offered a reduced service and required too much of a subsidy.

A Sark hotel and a restaurant owned by the Barclay brothers are set to reopen – based on the island establishing a customs post – on the expectation that the island will attract more visitors directly from France.

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