‘Very bad budget for the working families of the Isle of Man’

This budget is a very bad budget for the working families of the Isle of Man, thats according to the Manx TaxPayers’ Alliance.

The Alliance says that the Isle of Man Government’s decision to “slug workers with a ten percent increase in income tax rates is bad for the working families of the Isle of Man”.

The rise of income tax adds up to an extra £20 million of money being taken from worker pay on the Isle of Man.

Budget

The Alliance says: “Keeping the personal allowance so low – when inflation has surged over the last few years – means that the lowest paid workers in our community will suffer from the biggest increases in these tax rates.”

The Treasury Minister, Dr Alex Allinson MHK told Tynwald yesterday (February 20) the budget for this year will see taxes rise for both individuals and businesses.

It comes as the Manx Government is forecast to spend £1.3 billion to deliver its services over the next 12 months.

The higher rate of income tax for individuals is increasing to 22% and is forecast to bring in an extra £20 million.

The Treasury Minister says the extra money from raising taxes will be ring fenced for Manx Care.

The higher taxes come as the personal allowance is frozen at £14,500 for individuals or £29,000 for jointly assessed couples.

National Insurance

The misery for workers doesn’t end with tax rises, as National Insurance (NI) contributions will also go up.

• Class 1 and the lower profit limit for Class 4 will increase by 10% to £160 per week.
• The upper earnings limit for Class 1 and the upper profits limit for Class 4 NI will be increased by 8.5% to £938 per week.
• Class 2 and 3 contribution rates will be increased by 8.5% to £6.20 and £18.95 respectively.

The Treasury Minister said that his Department will be carrying out a full review of the NI system.

It has also been revealed that the Zero/Ten policy is also set for reform as there is a 5% increase for banking and large retailers who will now be paying 15% on their profits.

Dr Allinson says this will apply to organisations that would be subject to a top-up tax outside the Island under the OECD’s Pillar 2 Tax initiative.