Isle of Man Budget 2015

Home Publications Isle of Man Budget 2015

Isle of Man Budget 2015

The 2015 Manx Budget proposals were announced on 17 February 2015 by the Minister for the Treasury, the Hon W.E. Teare MHK, detailing various taxation and National Insurance measures. This can be found on the Isle of Man Government website on this link.

There have been some changes which we detail below.

 

Individuals


1) The income tax personal allowances applying from 6 April 2015:

  • Single Person's Allowance – £9,500
  • Married Couple’s Allowance – £19,000
  • Single Parent Allowance – £15,900 (including Single Person's Allowance)
  • Additional Registered Blind and/or Disabled Person’s Allowance – £2,900
  • Co-habiting Couples Allowance – £6,400
  • Age Allowance for all resident individuals who are aged 65 or over at the start of the tax year - £1,000

2) The tax rates and thresholds are unchanged, with the standard rate of income tax being 10% on taxable income up to £10,500 (£21,000 for married couples), and the higher rate of income tax being 20%.

 

3) The Tax Cap threshold, for resident individuals, has increased to £125,000 or £250,000 if jointly assessed. This increase will apply to new entrants into the scheme and the “five year” tax cap election still exists.

 

4) The income tax deduction thresholds per individual applying from 6 April 2015:

  • Nursing Expenses – £9,300
  • Donations to Charities – £7,000
  • Mortgage and Loan Interest - £7,500
  • Private Medical Insurance - £1,800
  • Educational Deeds of Covenant entered into on or before 5 April 2011 - £5,500

Please note that tax relief is restricted to 10% of the deductions available to individuals up to the maximum thresholds detailed above.

 

5) The National Insurance Contributions (NIC) rates and thresholds largely remain unchanged. However, there has been an increase in the “Lower Earnings Limit” threshold, the Class 2 NIC rate and the Class 3 NIC rate for voluntary contributions. There will be the introduction of a new “Employer National Insurance Holiday Scheme” to begin from 6 April 2015 and end on 5 April 2017. Further details can be found on the Isle of Man Government website on this link.

 

6) The Personal Allowance Credit has been reduced to £400 for payments made for the tax year 2014/15 which are paid after 6 April 2015 to the elderly and disabled only. Therefore if total income is less than £9,500, the full Personal Allowance Credit of £400 will be paid.

 

Companies

  • Companies with Banking Business income continue to pay tax at 10%.
  • Companies with retail business continue to pay tax at 10% on relevant taxable profits of more than £500,000.
  • Companies may elect to pay Manx tax at 10%, and this election is for 5 years.
  • Companies with Manx land and property will now pay tax at 20% on that income. Further details can be found on the Isle of Man Government website on this link.
  • Other company profits are taxable at 0%.

 

Proposals for next year


There have been various announcements in the budget for consultation over the next 12 months. This includes:

 

  • The abolition of the 10% rate of income tax, meaning a flat-rate of 20% on taxable income above the personal allowance.
  • The abolition of the Age-Allowance.
  • Increase the Personal Allowance to over £14,000 to allow for the abolition of the 10% tax rate, and age allowance.
  • The abolition of the Personal Allowance Credit system.
  • Introduction of National Insurance Contributions for employees who are of state pension age.

 

Please view our Manx Tax Guide 2015-16 for further information on the current Isle of Man tax rates.

(Please note that the Isle of Man VAT registration and deregistration thresholds for 2015/2016 are £82,000 and £80,000 respectively.)

 

If you have any queries or would like to discuss your tax situation please contact:

 

Dennis McGurgan


This article has been prepared from the Isle of Man Governments budget announcements and could be subject to revision. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Grant Thornton Limited, its directors, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

 

Grant Thornton Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. Please see www.grantthornton.co.im for further details.