Among the key changes unveiled by Treasury Minister Dr Alex Allinson is the first personal income tax rise in more than decade in a move that will hit thousands of earners.
All Isle of Man Government departments are set to get more money to spend as part of this year’s budget.
Changes to pensions and child benefit have also been announced.
The following are all the key points and figures from the Budget announcement. You can also click on one of the articles listed below to learn more...
TAX
•Higher rate of income tax will increase from 20% to 22% with the additional income being ring-fenced for the island’s healthcare services.
•Rate of income tax on taxable income for non-resident individuals and non-corporate entities will also increase from 20% to 22%.
•Proposed creation of a standalone annual NHS levy, which would replace the tax increase and also apply to residents who don’t pay income tax here.
•Corporate taxpayers in receipt of income from petroleum extraction in the island and its territorial sea will be subject to tax at a rate of 20%.
•A tax rate increase from 10% to 15% for certain banking businesses and large retailers will be introduced in respect of the 2024/25 tax year only. The 15% rate will only apply to banks and retailers whose profits would otherwise be subject to a top-up tax outside the island.
•The income tax personal allowance will remain at £14,500 for a resident individual and £29,000 for a jointly assessed couple.
•For higher earners, the personal allowance will continue to be reduced by £1 for every £2 that a person’s total income is above £100,000 (£200,000 for jointly assessed couples). This means if a person’s total income is £129,000 (£258,000 for jointly assessed couples) or above their personal allowance will be zero.
•The income tax lower rate for individuals will remain at 10%. The threshold at which the higher rate of income tax becomes payable will remain at £6,500 for an individual and £13,000 for a jointly assessed couple.
•Primary and secondary threshold for Class 1 National Insurance contributions and the lower profit limit for Class 4 National Insurance contributions will be increased by 10% to £160 per week.
•Upper earnings limit for Class 1 National Insurance contributions and the upper profits limit for Class 4 National Insurance contributions will be increased by 8.5% to £938 per week. Class 2 and Class 3 National Insurance contribution rates will be increased by 8.5% to £6.20 and £18.95 respectively.
•The National Insurance Holiday scheme will continue for a further year.
PENSIONS
•Under the ‘triple lock’ uprating – the basic state retirement pension and Manx state pension increase by 8.5%
•Those in receipt of the full Manx state pension will receive an extra £18.83 each week, and £979.16 more over a year (based on 52 weeks)
•Additional pension (‘SERPS’) and Manx state pension protected amounts (6.7%)
•Around 20,000 pensioners will see their state pensions increased by between 6.7% and 8.5%
FAMILY / OTHER
•Maternity Allowance, Adoption Allowance and Paternity Allowance – (15.0%) maximum rates will rise from £210 to £241.50 a week. Maternity allowance standard rate will rise from £182.90 to £210.35
•Maternity Payment – (7.1%) will be a lump-sum of £750•Child Benefit – for first or only child in a family (5.7%) for second and subsequent children (60.3%). Family with two children – up to an extra £12.05 per week/£626.60 per year; Family with 3 children – up to an extra £22.60 per week/£1,175.20 per year.
•Bereavement Support Payment (6.7%)
•Employed Person’s Allowance, Income Support and income-based Jobseeker’s Allowance – basic personal allowances and allowances for children (5.7%)
SICKNESS AND DISABILITY
•Incapacity Benefit (6.7%)
•Incapacity Benefit – permitted work higher weekly earnings limit (6.7%)
•Carer’s Allowance (6.7%)
•Carer’s Allowance - weekly earnings limit (6.7%)•Attendance Allowance (5.7%)
•Disability Living Allowance (5.7% generally, 6.7% for higher rate mobility component)
•Nursing Care Contribution (6.7%)