This morning the Treasury Minister announced the 2025/26 budget, but how does it compare to last year.
Arguably the hot topic of this year’s budget is the lowering the highest rate of income tax by 1 percentage point to 21%.
In close pursuit for the top spot in this years budget is the increase in personal income tax allowance by £250.
Finally, the third key point from this years budget is the changing of the National Insurance thresholds.
The Employed
This year those on ‘median wage’ of £38,064 will be £269 better off than the previous financial year.
Minimum wage workers who earn £23,569 will take home £124 more.
Last year, Median wage workers earned £34,996 and were £194 worse off (£16 per month);
While, low earners on minimum wage at £20,683 per year, were £85.80 better off.
Income Tax on Self Employed
Last year, the self employed who made £50,000 were £813 a year worse off (£67.75 a month) and took less home than UK self employed tax payers.
However this year, if you make £50,000 you’ll be £342.50 better off than last year thanks to the changes in personal allowance and tax reduction.
From April, individuals will start paying tax on annual earnings over £14,750, compared to £14,500.
Whilst, jointly-assessed couples will start from £29,500 compared to the previous of £29,000.
Child Benefit
The number of families able to claim Child Benefit will increase from April of this year.
The previous weekly rates of child benefit are below:
The thresholds to qualify for child benefit support will rise by £10,000, to a maximum of £90,000.
National Insurance
Increasing National Insurance Class 1 Primary and Secondary Thresholds and Class 4 Lower Profits Limit will mean workers start to pay NI on earnings of £168 a week rather than £160.
The upper profits level will see a 10% increase, rising from £938 to £1,032 a week, with anything over this to be charged at 1%.
There will be no change to employers’ National Insurance contributions for the new financial year.
The National Insurance Holiday Scheme will continue for returning Manx students, but will close to new residents who start work after April 5.
The Budget & You
Government revenue spending for 2025/26 is budgeted at £1.46 billion, representing £17,249 for every person on the island.
Last year’s budget was set at £1.3billion equating to £16,343 per person on the island.
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