BUDGET: Income Tax rate to increase

Higher rate jumps from 20% to 22%

For the first time since 2010 taxes on the Isle of Man are going up.

From April, the higher rate of Income Tax will jump from 20 percent to 22 percent.

The announcement has been made as part of the 2024-2025 Budget which was unveiled in Tynwald today (20 February).

Treasury says the additional income generated will be ‘ring-fenced’ for the Island’s healthcare services.

You can find out more HERE.

The rate of Income Tax on taxable income for non-residents, and non-corporate entities, will also increase to 22 percent.

A new tax strategy has also been proposed which will look to create a standalone annual NHS levy.

This would aim to replace the tax increase and would also apply to residents who do not pay Income Tax on the Isle of Man.

Allowances

• The Income Tax personal allowance will remain at £14,500 for an individual resident and £29,000 for a jointly assessed couple.

• The Income Tax lower rate for individuals will remain at 10 percent.

• 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.

High Earners

• 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 (or £200,000 for jointly assessed couples).

• This means if a person’s total income if £129,000 (£258,000 for jointly assessed couples), or above, their personal allowance will be zero.

• A tax rate increase from 10 percent to 15 percent for certain banking businesses and large retailers will also be introduced for this tax year only.

• The 15 percent rate will only apply to those whose profits would otherwise be subject to a top-up tax outside the Island under the OECD’s Pillar 2 Global Minimum Tax initiative.

Other

• Corporate taxpayers, in receipt of income from petroleum extraction on the Isle of Man and its territorial sea, will be subject to a Petroleum Extraction Tax rate of 20 percent from April.

• A new benefit-in-kind calculation for cars provided by an employer to an employee for private use will be primarily based on CO2 emissions and the list price of the vehicle.

• The benefit in kind calculation, in respect of fuel, will also be aligned with the car’s emissions.

Tynwald will vote on the Budget later today.

Find out more about this year's Budget and how it will affect you by clicking HERE.