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Budget 2024

In his Budget speech of 20 February 2024, the Minister for the Treasury, the Hon. Dr Alex Allinson MHK, announced various taxation and National Insurance measures.

Following the Budget, the Income Tax Division of Treasury has today published 2 Practice Notes:

PN 222/24 – Budget 2024 - Income Tax and National Insurance Proposals

PN 223/24 – Benefit in Kind – Taxation of Car and Fuel Benefit

Budget 2024 - Tax Headlines

  • The income tax personal allowance will remain at £14,500 for a resident individual and £29,000 for a jointly assessed couple

  • The income tax lower rate for individuals will remain at 10%

  • The higher rate of income tax will increase from 20% to 22% on a temporary basis until an 'NHS Levy' is developed. The threshold at which the higher rate of income tax becomes payable will remain at £6,500 for an individual and £13,000 for a jointly assessed couple

  • For higher earners, the personal allowance will continue to be reduced by £1 for every £2 that a person’s total income is above £100,000 (£200,000 for jointly assessed couples). This means if a person’s total income is £129,000 (£258,000 for jointly assessed couples) or above their personal allowance will be zero

  • New benefit in kind calculation for cars provided by an employer to an employee for private use will primarily be based on CO2 emissions and the list price of the car. The benefit in kind calculation in respect of fuel will also be aligned with the car’s CO2 emissions

  • The rate of income tax on taxable income for non-resident individuals and non-corporate entities will also increase from 20% to 22%

  • Corporate taxpayers in receipt of income from Petroleum extraction in the Isle of Man and the territorial sea adjacent to it will be subject to tax at a rate of 20%

  • A tax rate increase from 10% to 15% for certain banking businesses and large retailers will be introduced in respect of the 2024/25 tax year only. The 15% rate will only apply to those banks and retailers whose profits would otherwise be subject to a top-up tax outside the Island under the OECD’s Pillar 2 Global Minimum Tax initiative

Budget 2024 - National Insurance Headlines

  • The primary and secondary threshold for Class 1 National Insurance contributions and the lower profit limit for Class 4 National Insurance contributions will be increased by 10% to £160 per week

  • The upper earnings limit for Class 1 National Insurance contributions and the upper profits limit for Class 4 National Insurance contributions will be increased by 8.5% to £938 per week

  • Class 2 and Class 3 National Insurance contribution rates will be increased by 8.5% to £6.20 and £18.95 respectively

  • The National Insurance Holiday scheme will continue for a further year
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