Treasury Minister Dr Alex Allinson has delivered his third Budget in Tynwald this morning - and insisted: ‘We have listened to the people.’

There was drama beforehand as a number of MHKs led by former ministers Lawrie Hooper, Julie Edge and Chris Thomas, attempted to prevent standing orders being suspended in a bid to stop the Budget being heard.

Chief Minister Alfred Cannan said there was nothing to be achieved by this. ‘It’s simply destabilising and frankly irresponsible to prevent the Budget being heard,’ he told members. ‘Let’s hear the Budget.’

In the end, MHKs voted 18 votes to six, with a unanimous vote by MLCs, to suspend standing orders.

Dt Allinson promised to put more money in people’s pockets after announcing he was cutting income tax, raising the personal allowance and changing National Insurance thresholds.

He said he was delivering on commitments to support working families and protect businesses, while targeting investment in health, education and government efficiency.

The Treasury Minister Allinson described it as a ‘responsible and sustainable’ Budget.

He said: ‘These measures combine to specifically help single people on low wages and working families putting an extra £1,000 into the pockets of a middle income household with two children.

‘I am not naive enough to think it is possible for any budget to give everyone what they wish for, but I hope I have illustrated that this administration have listened.

‘We have heard the voices of our community and business sectors and responded with a coherent programme to put more money in people’s pockets, support our local economy especially small businesses and encourage economic growth, the benefits of which will be felt by all.’

He announced that thanks to finalising the FERSA agreement with UK over the island’s share of pooled VAT revenue, money previously held back could now be released and an additional £10m will now be available to offset anticipated additional spending in the forthcoming year.

Here are his headline announcements:

• Higher rate of Income Tax to fall from 22% to 21%

• Personal income tax allowance to rise by £250 for individuals, £500 for jointly-assessed couples

• Changes to National Insurance thresholds will mean more take-home pay for many

• More families can claim Child Benefit as thresholds increase by £10,000

• Protection for businesses with no increase to employer National Insurance contributions

• £25m available for Health and Social Care

• Education funding to increase by £8.3m

• £5.3m committed to digitising/automating processes across Isle of Man Government

The treasury minister said: ‘Last year, following the Budget, the Chief Minister and Council of Ministers visited the four corners of our island to listen, learn and hear the voices of our community.

‘We again held another successful Government Conference last September and continued to respond to the needs and requests of our business sectors to drive economic recovery from the global turmoil over the past few years.

‘We have listened to the people, and this Budget seeks to deliver.’

Referring to a cut in income tax and changes to the personal tax allowance, National Insurance and benefits, the Minister told members: ‘These measures combine to specifically help single people on low wages and working families, putting an extra £1,000 into the pockets of a middle income household with two children.’

Government revenue spending for 2025-26 is budgeted at £1.46bn, representing £17,249 for every person in the island.

An extra £25m in additional funding will be available to the Department of Health and Social Care to fund improvement in the NHS, and especially access to GPs and community dentists.

Support for young people will see education funding increase by £8.3m, including an additional £3m to deliver the aims of the Childcare Strategy, providing additional financial support to working families.

TAX

The higher rate of Income Tax will fall from 22% to 21%, reducing the financial burden on families and putting money back in people’s pockets.

The personal income tax allowance will rise by £250. From April, individuals will only start paying tax on annual earnings over £14,750 with jointly assessed couples starting from £29,500.

Revenue collected by implementing new global tax rules will lead to £10m a year being allocated to support businesses in our local economy from 2027-28 to 2029-30.

From April this year the tax cap will increase to £220,000 a year.

A consultation will be launched into the creation of a healthcare levy to help address the growing cost of the National Health Service.

NATIONAL INSURANCE

Increasing National Insurance Class 1 Primary and Secondary Thresholds and Class 4 Lower Profits Limit will mean workers keep more money through starting to pay NI on earnings of £168 a week rather than £160.

There will be no change to employers’ National Insurance contributions for the new financial year, enabling businesses to plan with confidence and support their employees.

The National Insurance Holiday Scheme will continue for returning Manx students, but will close to new residents who start work after April 5 this year.

IMPROVING GOVERNMENT PERFORMANCE

Departments will receive uplifts of 2% for pay and 1% for non-pay as part of this year’s Budget measures, aligning with the drive for greater efficiency across the Isle of Man Government.

Digitising and automating processes in order to achieve greater efficiency across the Isle of Man Government will benefit from investment in the Transformation Fund totalling £5.3m.

BENEFITS

The number of families able to claim Child Benefit will increase in April, as the thresholds to qualify for support will rise by £10,000, to a maximum of £90,000.

Most benefits will increase in line with inflation at September 2024 – reciprocal benefits with the UK by 1.7% (UK CPI) and others by 2.2% (Isle of Man CPI).

Above inflation benefit rises will be applied to the Nursing Care Contribution (5.3%) and Maternity, Paternity and Adoption allowances (3.5%).

The Winter Bonus, an annual benefit aimed at helping vulnerable individuals with fuel payments and staying warm, will be increased by £50 to £400.

The Basic State Pension will increase by 4.1% to £176.45 a week. The Manx State Pension will also rise by 4.1% to £251.30 a week.

COMMUNITY INVESTMENT

Investment supporting the aims of Our Island Plan is being enabled through injections to existing funds focussing on transforming our health service (£4m), developing major infrastructure projects (£5m) and supporting the agriculture industry (£4m).

The creation of a Housing Deficiency Fund, comprising £7.5m from the Department of Infrastructure and an injection of £2m from reserves, will centralise funding for local authority housing schemes, providing additional affordable housing.

CAPITAL PROJECTS

A full capital programme totalling £300m commits investment in the Island over the next five years.

Capital expenditure of £87.4m in 2025-26 will support the local construction sector and provide much needed improvements to critical national infrastructure.

More than £1m will be invested in improving sports facilities around the Island and £6.1m will be committed to maintaining the Island’s roads.

FIVE-YEAR PLAN

The Isle of Man Government will continue to reduce its reliance on reserves over the next five years.

The medium-term financial plan allows for a total of £110.6m to be withdrawn to balance the budget in 2025-26, gradually reducing to £49.7m in 2029-30.

The plan also shows the island’s reserves growing to £2bn and the National Insurance Fund continuing to grow to over £1bn by 2030.

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