The Treasury Minister has responded to Rachel Reeves’s first Autumn Statement as UK Chancellor - outlining some of the implications for the next Manx Budget in February.

One of the headline announcements in the budget was a sharp rise in employer national insurance contributions which will generate £25bn a year.

The rate that employers pay in contributions will rise from 13.8% to 15% from April and the threshold at which employers start paying the tax on each employee’s salary will be reduced from £9,100 per year to £5,000.

Dr Alex Allinson said: ‘We have separated ourselves from the UK NI system and so do not have to follow the changes announced on Wednesday.

‘Treasury are currently working on the Budget for next year and are taking a debate to November Tynwald regarding the long-term sustainability of the NI Fund.’

As expected, the Chancellor also announced the non-dom tax regime will be abolished, removing a 50% discount for non-doms bringing foreign income into the UK in the first year.

Dr Allinson said: ‘The end of the UK's non-dom tax regime from 2025 probably represents both opportunities and risks for the Isle of Man.

‘Given the Isle of Man’s appeal to non-doms, this change could influence relocation and financial planning for those affected by the new residency-based taxes. Such huge net-worth people are internationally mobile and may be tempted to move to other jurisdictions such as Monaco.’

But he said there could be risks, too.

He said: ‘However, given Mrs Reeves’s strong focus on addressing tax avoidance in the budget, there could be increased scrutiny and pressure on the Isle of Man and the Channel Islands to tighten their own tax laws, or require more transparency on IoM-based accounts and investments.’

Dr Allinson added: ‘The Treasury is examining the full impact of the announced changes for our island. There was extra support for working families and investment in the health services and education, all of which were main policies of our own Budget this year.’

In line with the Customs and Excise Agreement with the UK, the Isle of Man will continue to apply the cut in fuel duty by 5p per litre which has been extended for a further 12 months.

Following the Autumn Statement, the Isle of Man has increased duty rates for tobacco products. The rates of most tobacco products will increase by the UK Retail Price Index plus 2%, with the rate for hand-rolling tobacco increasing by an additional 10%.

Alcohol duty rates for non-draught drinks will increase in line with RPI from February 1 next year. However, duty on draught drinks will fall by approximately a penny on an average pint (4.58% alcohol by volume or ABV).

Again following the Chancellor’s statement, VAT will be applicable in the Isle of Man to private school education, training and boarding services from January 1.

The Soft Drinks Industry Levy and Plastic Packaging Tax will both increase. However, both the rate and date of implementation will remain uncertain until the publication of the UK Finance Bill.