Isle of Man Government Employee Relocation Incentive

The isle of Man Government have released the following information relating to their relocation incentive scheme:

Appendix 6: Financial assistance to encourage expansion to the Islands Workforce

Background

In accordance with Vision 2020, the Department is seeking to encourage an expansion of the Island’s workforce. This is in the Island’s national interest as it helps both to grow the economy and to balance the Government’s budget by generating additional tax revenue.

The Department appreciates that:

businesses may have a choice of international locations where they can locate jobs; and
many existing Island businesses require additional skilled staff who are not available locally to take newly created jobs
As such, the Department wishes to incentivise businesses to create jobs on the Island and to bring new employees to the Island.

For the purposes of this Appendix, the term “employee” means the employee who fills or will fill the position in respect of which the application for assistance is made and which could include a new employee or an existing employee of the business who is relocated to the Island.

In recognition of the additional recruitment and relocation costs in connection with off Island employees, subject to meeting eligibility requirements, financial assistance is available where:

a new or existing business creates jobs on the Island or relocates jobs to the Island from elsewhere; and
the jobs are taken by off Island workers.
This is subject to a condition that the business must be expanding its overall workforce by at least the number of full-time equivalent employees (FTEEs), in respect of which assistance is sought.[1]

Assistance available

Assistance is by way of a grant, paid retrospectively, of 20% of the salary paid to the relevant employee for his or her first year of employment on the Island. For the purposes of this calculation, the amount of the salary will exclude bonuses, discretionary payments and the cost to the business of NI and superannuation costs. The maximum grant is £10,000 per employee.

Eligibility to apply for assistance

The business
–      must be in an eligible sector (see below);

–      must have a permanent establishment / place of business in the Island;

–      must be an eligible business under the Regulations (see further at sections 1 and 2);

–      must have up to date tax and NIC records and all payment and returns must be up to date; and

–      must be expanding its workforce on the Island.

The job
–      must not predate the application;

–      must constitute permanent, regular employment; and

–      must not be an excluded employment (see below).

The employee
–      must be directly employed by the business;

–      their work must take place predominantly on the Island

–      must not be resident on the Island for income tax purposes at the time of application;

–      must become resident on the Island for income tax purposes for the period of employment        in respect of which the grant is claimed;

–      must have commenced employment by 31st July 2017.

Other
An applicant must comply with the Control of Employment Act 2014 (CEA) and, in the case of any proposed workers from outside the European Economic Area, with the Immigration Act 1971 (of Parliament) and the immigration rules made under it, as they have effect on the Island.

In some cases the jobs may be covered by exemptions under the CEA. Where an exemption does not apply, applicants are advised to seek advice from the Department prior to or at the time of application.

Eligible sectors

Applicants meeting the eligibility criteria and recruiting staff engaged principally in export-related activity in the following sectors may apply for financial assistance:

Financial and Professional Services –
–      banking

–      insurance

–      fiduciary

–      fund management

–      space

–      management of ships, yachts or aircraft

–      legal and accounting

–      other financial services

E-Business
E-gaming
Manufacturing
Excluded employments

Assistance is not available in respect of the following employments:

in the supply, in the course of a business, of food or drink from a vehicle, tent or temporary structure;
in the sale by retail of goods otherwise than from a permanent place of business in the Island, whether at a fixed location or from door to door;
in or in connection with construction operations;
in shop work;
in tourist premises;
in licensed premises;
in the serving of refreshments;
in the provision of personal care;
in horticulture; or
in cleaning work.
Ineligible operations

Assistance is not available where an existing Island business is transferred from a transferor to a transferee.

Neither is financial assistance available where in the Department’s opinion, in order to obtain grant assistance, the business:

manipulates the employment status of some or all of the workforce (including after receipt of a grant);[2]
moves jobs  between connected Island employers or Isle of Man companies (including newly created companies) within the same Group (so that the jobs are not, in effect, new jobs); or
seeks to displace existing workers.
Application requirements

Applicants must submit the following information:

a signed application form BS1;
a summary of the business plan explaining how the applicant plans to increase its workforce on the Island. This must include:
–      (in the cases of existing businesses) details of the applicant’s current workforce,  specifically numbers of directly employed, permanent employees, both full-time and part-          time employees, the latter also expressed as FTEEs;

–      details as to jobs and salaries in respect of which assistance is claimed and (where appropriate) clarification as to which jobs are to be new jobs;

permission for the Department to obtain information from the Income Tax Division of Treasury as to the applicant and the applicant’s employees in respect of whom assistance is sought (which will in turn require the applicant to obtain the requisite permissions from its own employees).
Conditions for payment of grants

Payment of assistance will be made retrospectively only after it has been confirmed to the Department’s satisfaction that:

the relevant employee in respect of whom assistance is sought has completed 12 months’ continuous service;
salary paid to the employee for the relevant 12 month period;
the employment is consistent with details which were provided in the application;
the employment is to continue (and on the same basis); and
the applicant’s workforce has expanded in accordance with plans that were provided at the time of application (and to this end the applicant must provide information as to the number of FTEEs working in the business at the end of the 12 month period).
The Department will also verify data with the Income Tax Division before any assistance is paid and, where assistance has been paid, will retain the right to require part or full repayment, where in the Department’s opinion the business does not comply with both the terms and conditions contained in this Appendix in addition to the standard terms and conditions for assistance under the Financial Assistance Scheme referred to in paragraph 9 of these Guidelines.

[1] Exceptionally, the Department may consider applications from an applicant which has recently reduced or is planning to reduce one part of its Isle of Man workforce whilst expanding another where the applicant is able to satisfy the Department that the financial support will assist in securing additional employment.

[2] For example, a self-employed individual incorporates and becomes an employee in order to receive a payment, then reduces the salary and pays dividends in order to save NIC.

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