The Treasury Minister, Dr Alex Allinson MHK has told Tynwald 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 rises
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.
Budget 2024
Those who drive company cars have also come under fire with the Treasury changing the benefit-in-kind rules to be based on CO2 emissions and the list price of the car.
The calculation on fuel will also be aligned with the vehicles CO2 emissions.
A Petroleum Extraction Tax will also be brought forward; with the Gov taxing income from petroleum operations in the island, including its territorial sea, at a 20% rate from April.
Benefits & handouts increased
Most benefits and handouts will be rising by 6.7% or 5.7% with an extra £29.3 million of handouts being made to those on benefits.
EPA, Income Support and Jobseekers allowance will rise by 5.7%
For those in receipt of state pensions, the budget spells some good news an extra £18.83 each week being given to pensioners.
Maternity allowance standard rate is to rise from £182.90 to £210.35.
Child Benefit is to be increased with parents who have more than one child seeing an increase of £12.05 per week and those with three children receiving an extra £22.60 per week.
Manx.News will be bringing you more on the budget breakdown throughout the day.
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