Tax Matters 2020/21

A guide to Isle of Man taxes

Tax rates for the year 2020 - 2021


Income Tax

Allowances 2020/21 (£) 2019/20 (£)
Single Person 14,250 14,000
Married couple (combined) 28,500 28,000
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
Reliefs 2020/21 (£) 2019/20 (£)

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 (%) 2020/21 (£) 2019/20 (£)
Single person* 10 Up to 6,500 Up to 6,500
  20 Above 6,500 Above 6,500
Married couple* 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 election being made no later than 5 April 2020, a Manx resident’s tax liability will be fixed at £200,000 (or £400,000 for a married couple) for the five years commencing on 6 April 2020.

Companies 2020/21 Rate (%) 2019/20 Rate (%)
Banking business 0/10 0/10
Income from IoM land & 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%.


Benefits in Kind

Car benefit - 2020/21 Car Rate (£) Fuel Rate (£)
Cylinder capacity
Electric cars (regardless of capacity)
Nil Nil
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 2019/20.

Other Taxable benefits Taxable amount
Accommodation 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.

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 a new type of scheme, the Pension Freedom Scheme (PFS). A comparison of the key features of the two types of scheme is below:

  Current Schemes Pension Freedom Schemes

Maximum contribution -

Pre 6 April 2018 

Post 5 April 2018

 

£300,000

£50,000

 

N/A

£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 (with treaty relief if applicable)* ITIP (with treaty relief if applicable)
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

*Income restricted based on published limits


Capital Allowances

Rates 2020/21 and 2019/20 Rate (%)
Plant & Machinery - first year allowance
writing down allowance
100
25
Industrial Buildings & Structures - first year allowance
writing down allowance
100
4
Agricultural Buildings - first year allowance
writing down allowance
100
10
Tourist Premises - first year allowance
writing down allowance
100
10

For a motor car a first year allowance/writing down allowance of 25% may be claimed each year up to a maximum of £3,000 per annum.


Value Added Tax

  • Standard rate 20%
  • Lower rates of 0% or 5% apply in certain circumstances.
  • Registration threshold from 1 April 2020 £85,000 (2019 - £85,000) and will remain at £85,000 for 2 years from 1 April 2020.

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


National Insurance Contributions*

Class 1: Employee **   (%)
2020/21    
Earnings bracket (weekly) up to £138   Nil
£138.01 to £823   11
over £823   1
2019/20    
Earnings bracket (weekly) up to £125   Nil
£125.01 to £784   11
over £784   1
     
Class 1: Employer **   2020/21 (%)
Earnings bracket (weekly) up to £120   Nil
over £120   12.8
     
Classes 2 and 3  2020/21 (£) 2019/20 (£)
Class 2 (self employed flat rate)    
Per week 5.40 5.40
Small earnings exception (year) 7,176 6,500
Class 3 (voluntary)    
Per week 15.30 15.00
     
Class 4 (self employed)   (%)
2020/21    
up to £7,176   0
£7,176.01 to £42,796   8
over £42,796   1
2019/20    
up to £6,500   0
£6,500.01 to £40,768   8
over £40,768   1

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

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

National Insurance Holiday Scheme:

From 6 April 2019 certain new residents and returning students will be able to apply for a refund of the Class 1 NIC's paid as employees during the first 12 months of their employment here. This scheme is to continue for a further year starting 6 April 2020 (finishing 5 April 2021).


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 LLC’s 95

*Increased fees apply where returns are filed late.

 

 

Contact us

Kevin Cowley

Kevin Cowley

Partner, Tax Leader, PwC Isle of Man

Tel: +44 (0) 1624 689714

Andrew Cardwell

Andrew Cardwell

Director, PwC Isle of Man

Tel: +44 (0) 1624 689465

Phil Morris

Phil Morris

Director, PwC Isle of Man

Tel: +44 (0) 1624 689713

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Contact us

Kevin Cowley

Kevin Cowley

Partner, Tax Leader, PwC Isle of Man

Tel: +44 (0) 1624 689714

Andrew Cardwell

Andrew Cardwell

Director, PwC Isle of Man

Tel: +44 (0) 1624 689465

Phil Morris

Phil Morris

Director, PwC Isle of Man

Tel: +44 (0) 1624 689713

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