Budget 2026: Largest personal tax uplift could help boost local economy 

Taxpayers could be almost £500 a year better off 

It’s hoped increasing the personal tax allowance on the Isle of Man will make many taxpayers almost £500 a year better off and create a ‘small uptick’ in local consumer spending.  

Treasury says around 3,600 people will be brought out of the tax net when the limits change in April. 

Individuals will start paying tax on annual earnings over £17,000 – an increase of £2,250 – and jointly assessed couples will see their limit rise from £29,500 to £34,000.   

It’s the largest uplift in recent years and means the higher tax rate will become payable on income above £23,500.  

Minister Chris Thomas said: “This is triple the £750 proposed until the budget revisions took place a few weeks ago and that proposed £750 rise was already triple the only other rises since 2021.”  

The lower rate of Income Tax remains at 10 percent and the higher rate at 21 percent.  

The threshold for the lower rate of Income Tax remains at £6,500 for an individual or £13,000 for jointly assessed couples.  

National Insurance 

Class 1 primary and secondary thresholds, and Class 4 lower profits limits, will increase by 4.8 percent.  

Treasury says this means workers will keep more money through starting to pay National Insurance on earnings of £176 a week rather than £168.  

Class 2 and 3 thresholds will also increase by 4.8 percent.   

There will be no change to employers’ National Insurance contributions.  

Treasury says this will enable businesses to ‘plan with confidence’ and support their employees.  

The National Insurance Holiday Scheme will continue for returning Manx students.  

You can find out more about Budget 2026 by clicking HERE.