Isle of Man: Tax provisions in budget 2021

Isle of Man: Tax provisions in budget 2021

The 2021 budget includes a few items from a tax perspective.

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There are no changes proposed to the tax system for the 2021/2022 tax year (and thus no changes to tax and social rates, bands, and thresholds). For individual income tax, the current tax measures are as follows:

  • Personal allowance of £14,250 for single individuals and £28,500 for married couples
  • The threshold for the lower 10% tax band for a single person of £6,500 and for a married couple of £13,000
  • The higher tax rate of 20%

The budget proposals confirm that the National Insurance Holiday Scheme will continue for another year. Also, as a result of the coronavirus (COVID-19) pandemic, the scheme has been amended so that individuals who claimed “Manx Earnings Replacement Allowance” (MERA) or received a reduced salary from their employer that claimed salary support are not adversely affected. The National Insurance Holiday Scheme began 6 April 2019 and allows for a one-off refund of Class 1 National Insurance Contributions deducted in the first year (subject to certain qualifying conditions being satisfied), up to a maximum of £4,000.
 

Read a February 2021 report prepared by the KPMG member firm in Isle of Man

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