Students & School Leavers
I am a placement student - what is my position?
The pay you get during practical training from an employer is taxable.
Do I get any tax allowances?
If you live in the Isle of Man you will be entitled to claim the same personal allowance as any other Manx resident. The amount will depend on your personal circumstances, for example, whether you are married and living with your wife or not etc. Personal Allowances are the amount of income a person can receive before paying tax at the standard rate of 10% and the subsequent higher rate of 20%.
If you do not live in the Isle of Man, you will have tax deducted at the higher rate of 20% applicable to a non-resident on your Manx source employment income.
What should I do if I get a holiday job and live on the Isle of Man?
If your total income (including earnings, employment benefit and interest received etc.) in the whole tax year is likely to be less than the single person's allowance, you should contact the Income Tax Division to request and complete forms T18 and R104, (see downloadable documents). Your employer will then be issued with code NT which will mean that you can then be paid without any deduction of tax. If your taxable income is more than the personal allowances you will have to pay tax on the differences between the two amounts.
What do I pay tax on?
You will normally pay tax on all income, including tips, bonuses, part-time work and any earnings from outside of the Island as well as any interest from banks etc. Some Social Security benefits are taxable, others are not. For example sickness benefit is not taxable, but Income Support is.
You do not pay tax on:
- student grants
- most research awards
Do I pay tax on everything I earn?
No. You can earn or receive a certain amount of income without paying tax. This is called the personal allowance. The amount will depend on your personal circumstances, e.g. whether you are married/civil partners and living with your spouse/civil partner, or a single parent etc. Personal allowances are the amount of income a person can receive before paying tax at the standard rate of 10% and the subsequent higher rate of 20%.
Can I claim expenses?
The cost of tools or protective clothing used at work can sometimes be claimed for if they are not provided by your employer. You cannot claim for National Insurance contributions or the cost of travelling to and from work.
When do I start to pay income tax?
You will probably start to pay tax when you get your first job. If you go straight to a job when you leave school, you should contact this office as soon as possible and ask for a School Leaver – Personal Details Form (T18). A notice of coding can then be issued to you and your employer. If you do not complete this form the amount of income tax deducted from your wage or salary might be incorrect.
Will I have to complete a tax return?
If you live in the Isle of Man and are aged 16 or over you will be sent a return each year. You must fill it in properly and return it to the Income Tax Division.
If you live in the Isle of Man and you are aged under 16, you will not have to complete a return unless ITIP has been deducted or you have other income.
If you do not live in the Isle of Man and all your Manx income is taxed at source, you may not be required to complete a return.