Healthcare

NHS Levy:

Income tax is being raised by 2%, from 20% to 22%, which it's hoped will generate up to £20 million which will be ring-fenced for the health service.

The treasury minister has described it as a 'transition tax' which he's hoping to replace - with what he's called an 'NHS levy' - in the 2025/26 tax year.

Alex Allinson has referred to a forthcoming Tax Strategy which is due to be discussed by Tynwald members in March's sitting.

The strategy proposes the introduction of a standalone annual NHS levy which would aim to replace the tax increase.

Dr Allinson says: ‘Although our income tax receipts have been strong and are currently forecast to be in excess of £320 million, there still remains a gap in healthcare funding which must be addressed now and for the future.

‘After exploring my options for a balanced budget, I have made the decision to increase the higher rate of income tax from 20% to 22% and ring-fence this extra income to support our NHS.’

He adds: ‘I intend to lead a debate on [the Tax Strategy] next month and work with Members to investigate bringing forward a new “NHS levy” which could then replace this increase in the upper rate of Income Tax and lead to a fairer way that all those in our community could help fund the healthcare system they rely on.

‘It is my ambition to introduce the levy from the 2025-26 income tax year and therefore the necessary legislation will need to be brought forward prior to this.’

Healthcare Transformation Fund:

Meanwhile, £3.5 million is proposed to be added to the Healthcare Transformation Fund to continue supporting the ongoing work of implementing the recommendations in the Sir Jonathan Michael Report.