BUDGET 2025: Should healthcare levy be created on IoM?

Treasury wants to address 'growing cost' of NHS

Treasury says it will launch a consultation into whether a healthcare levy should be created on the Isle of Man.

It wants to address the ‘growing cost’ of the National Health Service.

£25 million of additional funding is being made available this year for the Department of Health and Social Care.

This is designed to fund improvements to the NHS – in particular for access to GPs and community dentists.

Last year the higher rate of Income Tax was raised by two percent from 20 percent to 22 percent. 

It’s estimated that generated £20 million which was 'ringfenced' for the health service.

At the time the treasury minister described it as a ‘transition tax’ which he hoped to replace with what he called an ‘NHS levy’ in the 2025/26 tax year.

That healthcare levy is not being introduced in this year's Budget; in November Alex Allinson admitted it’s been ‘far more complicated’ than he thought to implement.

He also ruled out removing the increase to the higher rate of Income Tax while it was worked on.

While it still won’t be removed it will go down slightly from 22 percent to 21 percent.

The intention is to still ringfence the extra one percent for healthcare.

Meanwhile £4 million is being added to the Healthcare Transformation Fund to continue supporting the ongoing work of implementing the recommendations in the Sir Jonathan Michael Report.

Treasury has a revenue contingency budget which can be accessed if a ‘robust’ business case is presented by departments or boards if they face unanticipated costs that they can’t absorb within their planned budgets.

The level of this fund has been set at £19.7 million for 2025/26.

£14 million of this contingency funding has been included specifically for potential Manx Care cost pressures.

Manx Care’s budget increases each year using a specific funding formula which currently sits at 5.23 percent.

That means it’s adding £11 million to its budget this year raising it to £371.5 million.

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