Tax Matters 2023/24

A guide to Isle of Man taxes

Tax rates for the year 2023 - 2024

Income Tax
Rates
Value Added Tax
Inheritance Tax
National Insurance Contributions
Benefits in Kind
Company fees and duties
Personal Pensions and Retirement Annuities
Capital Allowances

Income Tax

Allowances	23/24 (£)	22/23 (£)
Single Person	14,500	14,500
Married couple/ civil partners (combined)	29,000	29,000
Blind person’s addition	2,900	2,900
Single parent’s addition	6,400	6,400
Disabled person’s addition	2,900	2,900
Co-habiting couple’s addition	6,400	6,400
Aged addition	Nil	Nil
Non-resident’s personal allowance	Nil	Nil
War Pensioners Mobility Supplement	2,900	2,900

Reliefs	23/24 (£)	22/23 (£)
Interest paid to Manx residents lenders (maximum)*	5,000	5,000
Covenanted educational payments*	5,500	5,500
Charitable donations*	7,000	7,000
Charitable donations by a company	15,000	15,000
Nursing expenses*	12,500	12,500

* Tax relief is restricted to 10% of the amount paid and in respect of educational deeds of covenant is restricted to payments made under covenants that have been entered into on or before 5 April 2011 and where the student is in qualifying full time education at that date.

Rates

Individuals	Rate (%)	23/24 (£)	22/23 (£)
Single person*	10	Up to 6,500	Up to 6,500
	20	Above 6,500	Above 6,500
Married couple/civil partners*	10	Up to 13,000	Up to 13,000
	20	Above 13,000	Above 13,000
Non resident	20	All	All

* Subject to an irrevocable Tax Cap election being made, individuals have the option to elect for a ten year period, with the five year election also remaining available. The maximum income tax liability for an individual who has made the election is £200,000, or £400,000 for a jointly assessed couple. For any five year Tax Cap elections which commenced up to and including the 2019/20 tax years, the amount charged for each year is the value of the Tax Cap applicable in the first tax year covered by the election.

Companies	23/24 Rate (%)	22/23 Rate (%)
Banking business	0/10	0/10
Income from IoM land and property	20	20
Retail business*	0/10	0/10
Other	0	0

* Retail businesses with taxable profits of over £500,000 are subject to tax at 10%, those with taxable profits below that level are subject to tax at 0%.

Value Added Tax

Standard rate 20%
Lower rates of 0% or 5% apply in certain circumstances.
Registration threshold from 1 April 2023 £85,000 (2022 - £85,000).

Inheritance Tax

There are no inheritance, wealth, gift, death, capital gains, insurance premium taxes, or stamp duties in the Isle of Man.

National Insurance Contributions

Standard rates are shown. These figures may alter if an employee elects to contract out.

Class 1A: Employee**	23/24 (%)	22/23 (%)
Earnings bracket (weekly) up to £145	Nil	Nil
£145.01 to £864	11	11
Over £864	1	1
Class 1B: Employer** (%)
Earnings bracket (weekly) up to £123	Nil
Over £123	12.8
Class 2 (self employed flat rate) (£)
Per week	5.70	5.40
Small earnings exception (year)	7,540	7,176
Class 3 (voluntary) (£)
Per week	17.45	15.85
Class 4 (self employed) (%)
Up to £7,540 (from £7,176 in 22/23)	0	0
£7,540 to £44,928 (from £7,176.01 to £42,796 in 22/23)	8	8
Over £44,928 (from £42,796 in 22/23)	1	1

** Class 1A and 1B contributions are not charged in the Isle of Man.

Benefits in Kind

Car benefit 23/24	Car rate (£)	Fuel rate (£)
Electric cars (not hybrid)	Nil	Nil
Cylinder capacity:
1,000 or less	800	800
1,001 - 1,200	1,100	950
1,201 - 1,800	3,600	1,500
1,801 - 2,500	5,000	1,750
2,501 - 3,500	7,000	2,000
3,501 - 5,000	10,000	2,250
More than 5,000	12,000	2,500

Note: These rates are unchanged from 2022/23.

Other taxable benefits	Taxable amount
Accomodation	Cash equivalent
Use of an asset	20% of market value (or cost to employer if higher)
Other	Cost to employer

Chargeable benefits with an aggregate value of under £600 for the year are exempt from tax.

Exempt benefits

Accommodation used solely for duties of employment.
Approved Profit Sharing or Savings Related Share Options Schemes.
Car Parking space at or near place of work.
Medical/dental insurance.
Christmas party expenses up to £100 per head.
Provision of a personal computer for use at home up to benefit value of £1,000.
Nursery or creche facility expenses necessary for employees to attend work.
Bicycle and related safety equipment provided under a cycle to work scheme up to an annual maximum value of £1,200.

Company fees and duties

Incorporation fees	(£)
Standard - within 48 hours	100
2 hour incorporation	250
While you wait incorporation	500
Annual filing fees*
Standard	380
Excepted companies and LLCs	95

* Increased fees apply where returns are filed late.

Personal Pensions and Retirement Annuities

Flexible pension options exist via either of two common types of IoM scheme, being a Self-Invested Personal Pension (SIPP) and the Pension Freedom Scheme (PFS).

A comparison of the key features of the two types of scheme is below:

	Self Administered Personal Pension	Pension Freedom Scheme
Maximum annual contribution	£50,000	£50,000

Minimum age for receiving benefits	50 or 55	55

Tax free lump sum	Up to 30%	Up to 40%

Tax treatment of payments in excess of the tax free lump sum	ITIP*	ITIP*

Transfers from current IoM scheme to a PFS	10% charge withheld at source from transfers out of the PFS	10% charge withheld at source from transfers into the PFS

Amount charged on residue paid out on death	7.5% if scheme is not drawn down	Nil