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The Isle of Man ITIP Scheme

ITIP stands for Income Tax Instalment Payments and the ITIP scheme is the way in which tax is deducted from an employee’s remuneration (where applicable) by an employer on each pay day. The amount deducted should be paid to the Income Tax Division on a monthly basis. It is then credited to the appropriate employee at the end of the tax year and offset against the income tax payable on that employee’s assessment.

The scheme covers everyone who receives remuneration and includes employees, office holders such as directors, and pensioners. Any remuneration is subject to ITIP and tax should be deducted in accordance with the individual’s tax code.

For the purposes of ITIP, 'remuneration' means any payment of salary, wages, fees, pensions or annuities.

Examples of remuneration include the following:

  • advances of pay;
  • back pay;
  • bonus, including Christmas bonus;
  • cash payments;
  • commission;
  • expenses (unless dispensation granted);
  • fees (including some director’s fees);
  • holiday pay;
  • honoraria;
  • overtime;
  • pay in lieu of notice; 
  • payments after cessation of employment;
  • pensions and annuities;
  • prizes, cash incentive;
  • round sum expenses;
  • salary;
  • sick pay;
  • termination payments over £30,000 (balance only);
  • tips/troncs;
  • wages.

If an employer is not sure whether a payment should be subject to ITIP, they should contact the Income Tax Division for clarification as failure to deduct ITIP when required will result in the employer being liable for that deduction.

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