National Insurance Holiday Scheme

Customer Information Notice

On 18 February 2025, the Treasury Minister announced changes to the National Insurance Holiday Scheme.

From 6 April 2025, the scheme ceased to apply to new residents moving to the Isle of Man. The scheme is now available only to eligible Isle of Man students returning to the Island after completing a qualifying course of education.

New Residents

The National Insurance Holiday Scheme previously applied to certain new residents moving to the Isle of Man.

Legislative changes which took effect on 6 April 2025 removed the scheme for new residents. The former provisions continued to apply only where the qualifying 12‑month period of employment commenced on or before 5 April 2025. Applications were required to be made within six months following the end of that qualifying period.

As the latest possible application date has now passed, no further applications under the new resident provisions can be accepted.

Returning Students

The Scheme applies to Isle of Man students who:

  • On or after 6 April 2019, successfully complete a full-time course of education outside the Isle of Man leading to a university first degree, a Higher National Diploma (or comparable qualification) or a postgraduate qualification; and

  • Following completion of that course, return to the Isle of Man and take up qualifying employment

The course must be successfully completed on or after 6 April 2019. Students who completed their course before that date do not qualify for the scheme.

Furthermore, the scheme does not apply to:

  • Students undertaking distance learning or flexible learning courses; or

  • Students attending the Isle of Man University College

Employment Conditions

To qualify for the scheme:

  • The returning student must be employed by an employer (secondary contributor) who is resident in, present in, or has a place of business in the Isle of Man

  • The returning student must be resident in the Isle of Man for Income Tax purposes

  • The returning student must be an Isle of Man worker as defined by the Control of Employment Act 2014; and

  • The returning student must have been employed for a period of more than 12 consecutive months in qualifying employment which:

    • Commenced within 5 years of successfully completing the course of education

    • Is permanent employment; and

    • Is undertaken in the Isle of Man

A returning student who satisfies all the above conditions may apply for a return of their Class 1 National Insurance contributions paid during the first 12 months of qualifying employment, up to a maximum amount of £4,400. Any contributions refunded under the scheme will continue to be treated as paid for all National Insurance purposes.

What is permanent employment

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

Making an Application

A returning student should complete the form:

Application for National Insurance Holiday Scheme Returning Student – R247(RS).

A copy of the form can be downloaded from the National Insurance section of our Forms page.

All sections of the application must be completed in full.

Supporting Information

To support the application, a returning student should provide the following:

  • Contract of employment
  • All payslips relating to the 12-month period of employment to which the application relates; and
  • Education course details

The application must be made after the end of the 12 months to which the claim applies, but not later than 6 months after that date, together with copies of the supporting information detailed above. If the application is not made within the permitted timeframe the application will not be accepted.

A returning student may apply for and receive the return of primary Class 1 contributions only once.

Example

A student returned to the Island on 7 July 2026 and commenced work on 14 July 2026 and continues to be employed. The application must be made after the end of the first 12 months of employment, but no later than 6 months after the end of that period.

The first 12 months of employment is from 14 July 2026 to 13 July 2027.

The application must be made by 13 January 2028.

Amount Repayable

If the application is successful, the returning student will have their Class 1 National Insurance contributions paid during the first 12 months of qualifying employment returned to them, subject to a maximum amount of £4,400. Any refund due will first be offset against any outstanding Income Tax and/or National Insurance liabilities. Any remaining balance will then be repaid to the applicant.

Any contributions repaid under the scheme will continue to be treated as paid for all National Insurance purposes.