BUDGET 2025: Financial plan ‘seeks to deliver’ says treasury minister

Higher rate of Income Tax cut, personal allowance raised and alterations to NI

The treasury minister says this year’s Budget ‘seeks to deliver’.

Alex Allinson unveiled the financial plan for 2025/2026 in Tynwald this morning (18 February).

The higher rate of Income Tax has been cut from 22 percent to 21 percent and the personal allowance has been raised by £250 for individuals and £500 for jointly assessed couples.

National Insurance thresholds are being altered which Treasury claims will mean ‘more take-home pay for many’; Child Benefit thresholds have also been increased by £10,000.

Minister Allinson said: "Last year, following the Budget, the chief minister and Council of Ministers visited the four corners of our Island to listen, learn and hear the voices of our community.

"We again held another successful government conference last September and continued to respond to the needs and requests of our business sectors to drive economic recovery from the global turmoil over the past few years.

"We have listened to the people and this Budget seeks to deliver.

"These measures combine to specifically help single people on low wages, and working families, putting an extra £1,000 into the pockets of a middle-income household with two children."

Increasing National Insurance Class 1 primary and secondary thresholds, and the Class 4 lower profits limit, will mean workers will pay NI on earnings of £168 a week rather than £160.

There will be no change to employers' NI contributions.

The National Insurance Holiday Scheme will continue for returning Manx students however it will close to new residents who start work after 5 April this year.

The Isle of Man Government says it will continue to reduce its reliance on reserves over the next five years.

The medium-term financial plan allows for a total of £110.6 million to be withdrawn to balance the budget in 2025-26; this will gradually reduce to £49.7 million in 2029-30.

The plan also shows the Island’s reserves growing to £2 billion and the National Insurance Fund continuing to grow to more than £1 billion by 2030.

You can find out more about Budget 2025 by clicking HERE.