Treasury Minister Dr Alex Allinson MHK has issued his reaction to the UK Government’s Spring Budget Statement, delivered on Wednesday (March 6) by the UK Chancellor, Jeremy Hunt MP.
Minister Allinson said: “Yesterday’s statement by the UK Government was wide-ranging and contained a number of elements of interest from an Isle of Man perspective.
“Moving their child benefit threshold will, of course, be welcomed by those on higher incomes in the UK.
“Our own announcements last month aimed to support working families – by raising child benefit rates across the board and increasing the amounts available for those with two or more children, significantly improving financial support for around 3,000 families.
“I also committed to review our own child benefit and income tax thresholds in next year’s Budget.”
Treasury Minister
He added: “I was pleased to note the UK’s commitment to invest in healthcare, in line with our Island commitment to ring-fence extra tax revenue and invest an extra £43.8 million in our NHS as well as £18.3 million extra for education.
“The UK announced a 2p cut to National Insurance rates. In last month’s Manx Budget we kept rates the same but increased the thresholds meaning that someone on low pay will be £85.80 per year better off.
“Looking ahead, we are in the process of examining potential changes to our own NI process with the aim of bringing forward options for discussion by Tynwald later in the spring to ensure the future of the NI fund is sustainable.”
Manx National Insurance
The misery for Manx workers doesn’t end with tax rises, as National Insurance (NI) contributions will also go up this year.
- Class 1 and the lower profit limit for Class 4 will increase by 10% to £160 per week.
- The upper earnings limit for Class 1 and the upper profits limit for Class 4 NI will be increased by 8.5% to £938 per week.
- Class 2 and 3 contribution rates will be increased by 8.5% to £6.20 and £18.95 respectively.
The Treasury Minister said that his Department will be carrying out a full review of the NI system.
It has also been revealed that the Zero/Ten policy is also set for reform as there is a 5% increase for banking and large retailers who will now be paying 15% on their profits.
Dr Allinson says this will apply to organisations that would be subject to a top-up tax outside the Island under the OECD’s Pillar 2 Tax initiative.
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