National Insurance Holiday Scheme

An individual may benefit from the scheme if, within the required timescale, they take up employment that meets the following requirements:

• It is permanent employment
• It is undertaken in the Island
• A minimum annual gross remuneration of £23,000 or a contract of employment to provide a minimum annual gross remuneration of £23,000  (£21,000 if employment commenced before 6 April 2023)

The remuneration requirement does not apply if the individual is a returning student.

To qualify for a refund, the person must remain in employment for a period of more than 12 consecutive months. The person is only entitled to one refund. 

In addition, the employer must be Isle of Man resident for National Insurance purposes.

A person who meets the requirements of the scheme will be able to apply for a refund of their Class 1 National Insurance contributions paid as an employee during the relevant 12 months of their permanent employment in the Isle of Man up to a maximum of £4,400 (£4,000 prior to 6 April 2023). Contributions refunded under the scheme will still be treated as paid for all other purposes.

To qualify for a refund, the person must remain in employment for a period of more than 12 consecutive months. The person is only entitled to one refund.

In addition, the employer must be Isle of Man resident for National Insurance purposes.

Permanent employment is an employment relationship which is expected to be continuing and has no predetermined end date.

Isle of Man student who, on or after 6 April 2019, successfully completes a full time course of education outside the Island for a university first degree, a Higher National Diploma (or comparable course) or a postgraduate course and who, after completing that course, returns to the Island to live and work. It will not apply to students who have undertaken a course of distance learning or flexible learning.

The graduation date has to be after 6 April 2019. Students who graduate prior to that date but do not return to the Isle of Man until after 6th April 2019 will not qualify for a refund.

Students at the Isle of Man University College will not qualify for a refund.

The application should be made after the end of the 12 months to which the claim applies, but not later than six months after that date.

Example

New resident arrived on the Island on 31 March 2023 and commenced work on 3 April 2023 and continues to be employed. They can make their application in April 2024 but no later than September 2024.

Additional evidence

Copies of the relevant contract of employment, pay slips and documentary evidence of the Educational courses completed should be submitted with the application.

As a new resident you may be asked to provide proof of when you commenced residence such as providing copies of your travel documents, rental agreements or other similar documents to evidence when you arrived on the Island.

No, only one claim is necessary. The National Insurance refund can apply to two separate tax years depending on the date of application.

To apply for a refund form R247 – Application for the National Insurance Holiday Scheme should be submitted to the Income Tax Division. Please note that early submission, before 12 months of employment, will not be accepted.

An employee to whom the scheme applies and whose employment meets the set conditions can apply to the Income Tax Division for a refund of the Class 1 National Insurance contributions they pay as an employee during the first 12 months of their employment up to a maximum of £4,400 (£4,000 applications received prior to 6 April 2023).

Where the person making the claim or a person connected to them has control over the employer either as a director or in another capacity, it will also be a requirement for the employer to be up-to-date with all Class 1 National Insurance contribution payments and all payments of Income Tax Instalment Payments in order for a refund to be made to the employee.

You will receive the full amount refundable unless you have an outstanding liability to Income Tax or National Insurance at the time of making the claim in which case the refund will be offset against that liability first before any remaining amount is refunded.