The Isle of Man is situated in the Irish Sea, midway between England, Scotland and Ireland. It is an internally self governing dependency of the British Crown, but is not part of the United Kingdom. The Island is approximately 32 miles long and 12 miles wide, with a population of around 77,000 in an area of some 227 square miles.

The Island has a special relationship with the European Union by virtue of Protocol 3 of the Act of Accession of the United Kingdom. This extends the European Union legal regime to the Island for limited purposes - principally customs and the free movement of goods and citizens. Nevertheless, certain EU legislation is introduced in an adapted format where considered essential. The Island neither makes to, nor receives from the European Union any financial contributions. The British Government is responsible for the defence of the Isle of Man and represents the Island in international affairs. There is a Customs Union between the UK and the Isle of Man, which extends UK Customs and VAT regulations to the Island. In all other respects the Isle of Man is self-governing, including direct taxation matters.