Health levy 'unlikely' to be ready by next budget

It had been hoped a new levy would be introduced in the 2025-26 tax year

A Manx healthcare levy has been "more complicated" than expected to implement and is "unlikely" to be ready for February's budget, the treasury minister has said.

Alex Allinson MHK introduced a 2% rise in the higher rate of personal income tax from April to generate a £20m boost for health, as demands and costs surged.

In February, he said it was his ambition the "temporary" increase would only in place until an health service levy had been "investigated and introduced".

While he did not confirm if the tax rise would be reversed during Tuesday's House of Keys sitting, he told members he had "no intentions" of increasing it further.

The tax rise from 20% to 22%, which applies to earnings above £21,000, was the first of its kind on the island since 2010.

During the session, the minister was questioned over the progress that had been made in devising a levy, and if an action plan with a timeline would be published.

Some MHKs also raised concerns the 2% tax rise would become "permanent".

'Properly considered'

In response, Allinson told members it was his intention to bring forward proposals for the charge "as soon as possible", but primary legislation was required as a National Health Service levy would "effectively be a new tax".

He said work on the move was continuing but further investigation within the Treasury and the wider government was needed to "deliver a more viable and sustainable funding provision".

The minister told members it was "imperative" any changes to the taxation system were "properly considered" so that "any impacts are correctly calculated" to allow it to help contribute to the revenue needed for present and future health and social care services.

Consultation with the public and "proper parliamentary debate" were key to any decisions but would take "a considerable amount of time", he said.

Allinson also rejected MHK Jason Moorhouse's concerns that the tax rise could double "given the increasing money required by Manx Care", which is facing a £16.8m predicted overspend this financial year.

The minister said MHKs and the public would be kept "informed of the direction of travel" on the levy, which would "lead to a fairer way for all those in our community to help fund the healthcare system we all rely on".