Isle of Man Budget 2022

February 15, 2022

At first glance David Ashford MBE MHK’s first budget is very much looking to the future and seeks to repair some of the damage done to the nation’s finances over the last two years as we come out of the pandemic. As well as plans for a five-year capital expenditure programme, the budget also includes additional funds to promote the return of the famous TT races, increased funding for Manx Care, the Health Transformation Fund, a boost for additional educational needs and extra funding for climate mitigation.

On an individual level there is a slight increase in personal allowance (giving extra income of c £50 p.a. for anyone in the 20% tax band), no change to NI contributions for employer and employees, and no surprise new taxes.

From a pensions perspective, Mr Ashford has opted to mirror the UK for state pension increases (3.1%) and importantly has made no change to the excellent tax benefits available to those investing in a pension either through their employer or individually. The maximum annual contribution remains at £50,000 p.a. (in comparison with the UK’s £40,000), contributions attract tax relief, and those in a PFS scheme (introduced by the previous Treasury Minister) can take 40% of the fund tax free from age 55.