The Treasury Minister has announced tax rises for some businesses, but says that “zero/ten” will remain in place for most smaller firms.
Announcing his 2024/25 Budget today, Dr Alex Allinson MHK said that he is increasing corporation tax for banks and larger retailers from 10% to 15%.
The Isle of Man had corporation tax set at 0% for all businesses except banking and property, however in April 2013, a new 10% tax was brought in aimed at the larger multi-nationals in the Isle of Man – many at the time labelled it as ‘The Tesco Tax’.
The tax was applied to all retail companies on the Island who have a taxable income of more than £500,000.
The new additional rate appears temporary in its current form, as the Minister said this increase will apply to the 2024/25 year only and will only apply to those whose profits would otherwise be subject to a top-up tax outside the Island under a Pillar 2 income inclusion rule in 2024.
It’s a way of making sure that extra money we need to put in to key essential services, isn’t just coming from working families, but is also coming from some of the companies that are based here
Dr Alex Allinson MHK, speaking about the rise in tax for larger companies
But despite the surprise rise, the Minister reassured smaller firms, which he described as ‘the backbone of our economy’, that they will be kept safe from the larger tax rises seen in the UK.
Dr Allinson stopped short guaranteeing the rate will remain at zero % for most firms.
New Taxation Strategy
Dr Alex Allinson MHK says that a new tax strategy will be brought forward and will be debated in the March sitting of Tynwald.
He said the strategy “commits us to zero/ten” and also the retention of policies on Capital Gains and Inheritance Tax where currently the Manx Government do not charge taxes.
The Minister said that the Isle of Man needs to remain competitive so that it attracts the inward investment that will enable the local economy to function and thrive.
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