Our Island Plan

Budget 2026

In his Budget speech of 17 February 2026, the Minister for the Treasury, the Hon. Mr Chris Thomas MHK, announced various taxation and National Insurance measures.

Following the Budget, the Income Tax Division of Treasury has today published a Practice Note:

PN 227/26 – Budget 2026 - Income Tax and National Insurance Proposals

Tax Headlines - Budget 2026

  • The income tax personal allowance will increase to £17,000 for a resident individual and £34,000 for a jointly assessed couple

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

  • The higher rate of income tax will remain at 21%. 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 £134,000 (£268,000 for jointly assessed couples) or above their personal allowance will be zero

  • The rate of income tax on taxable income for non-resident individuals and non-corporate entities will also remain at 21%

  • Tax Cap will remain at £220,000 per annum for elections commencing from the 2026/27 year of assessment

  • TT Homestay Allowance will increase from £2,350 to £2,500

  • The maximum amount of Nursing Expenses relief will increase from £12,500 to £15,000

National Insurance Headlines - Budget 2026

  • The lower earnings limit for primary Class 1 contributions will increase from £125 per week to £129 per week

  • The primary and secondary threshold for Class 1 National Insurance contributions and the lower profit limit for Class 4 National Insurance contributions will increase from £168 per week to £176 per week

  • The upper earnings limit for Class 1 National Insurance contributions and the upper profits limit for Class 4 National Insurance contributions will increase from £1,032 per week to £1,082 per week

  • Class 2 National Insurance contribution rates will increase from £6.45 per week to £6.75 per week

  • Class 2 National Insurance contribution rates payable by share fishermen will increase from £7.90 per week to £8.30 per week

  • Class 3 National Insurance contribution rates will increase from £19.70 per week to £20.65 per week

  • The National Insurance Holiday Scheme will continue for returning Manx students
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