Treasury Minister Dr Alex Allinson MHK presented his third Isle of Man Budget in Tynwald on Tuesday, 18th February 2025, outlining key measures to support working families, protect businesses, and drive government efficiency.
Describing it as a Budget for ‘stability, progress, and fairness,’ the Minister said it reflects the needs of the community while laying strong foundations for the future.
The Budget details how the Isle of Man Government will invest taxpayers’ money to deliver essential services, enhance national infrastructure, and support businesses, while ensuring long-term economic resilience. It aligns with Our Island Plan and the Economic Strategy to create a sustainable and prosperous future.
In relation to payroll, the following were announced:
Income Tax
- The higher rate of income tax will be reduced from 22% to 21%, easing financial pressure on families
- The income tax personal allowance will rise by £250, meaning individuals will start paying tax on income over £14,750, and jointly-assessed couples over £29,500 (Up £500)
- £10m per year from new global tax revenues will be allocated to support businesses from 2027 to 2030
- The tax cap will increase to £220,000 per year from April 2025
- A consultation on a healthcare levy will be launched later this year to address rising healthcare costs
National Insurance (NI)
- Protection for businesses with no increase in employer contributions
- Class 1 primary and secondary thresholds, as well as the Class 4 lower profits limit, increased, allowing workers earning £49,000 or less to keep more of their money
- Class 1 upper earnings limit and Class 4 upper profits limit also increased
- The NI Holiday Scheme will continue for returning Manx students
- This scheme will end for new residents. However, those who start work on or before 5 April 2025 will still be eligible, provided they meet the certain conditions
PAYadvice.UK 18/2/2025