On 15 February 2022, the Treasury Minister, Hon David Ashford MBE MHK, delivered his first Isle of Man Budget speech in Tynwald.
In light of the current economic uncertainty, and as Government await the outcome of the ongoing work on a new economic strategy, the Treasury Minister stated that he did not intend to make significant changes to the tax regime at this stage. The Minister did however announce a £250 increase to the personal allowance, taking it to £14,500 (or £29,000 for jointly assessed couples).
The Minister confirmed that the Assessor continues to monitor the ongoing work of the OECD and the EU with regard to international tax developments, particularly the introduction of the 15% global minimum tax which will apply to groups with turnover in excess of €750m. It was confirmed that this initiative would only impact a relatively small number of companies on the Island. However, this is the most significant international tax initiative that the Island is currently facing and will need to be monitored closely over the coming months by those businesses that are potentially impacted.
It was also announced that in the coming months there will be a consultation on a number of issues relating to proposed reforms to the National Insurance system. It has been recognised for quite some time that there are disparities between the overall rates of contributions payable in respect of employees versus the self-employed or owner-managed businesses – we expect that the consultation may well seek to address this area. However, as a result of this planned consultation, the Minister announced that there were no material changes to the National Insurance system in the 2022 Budget.
Further details in relation to the Budget can be found here: Isle of Man Government - 2022-23 Budget
If you have any questions in relation to the 2022 Isle of Man Budget or any other tax matter, please don't hesitate to contact us.