CONSULTATION LAUNCHED INTO MODERNISING NATIONAL INSURANCE

A consultation process has opened aiming to gather views on National Insurance.

The exercise follows the publication of an independent report into the National Insurance Scheme, commissioned by Treasury last year. The report identified a number of areas that could be reformed to make the scheme fairer, and to remove certain anomalies.

Treasury Minister Dr Alex Allinson MHK said: ‘The National Insurance Scheme is not well understood by many but it plays a significant role in providing benefits and state pensions to large numbers of people. It is only right that those who benefit from this scheme should, where appropriate, contribute to it.’

The consultation raises the following issues:

• whether all workers should pay National Insurance regardless of how their affairs are structured
• whether employees who own their own business should pay National Insurance which aligns with a self-employed individual
• removing the requirement to pay Class 2 National Insurance contributions on a monthly basis and paying them instead alongside Class 4 National Insurance contributions as part of an income tax assessment
• aligning definitions so that, where possible, income from employment is treated equally for both the purposes of National Insurance and income tax

Minister Allinson added: ‘For any taxation scheme to maintain public confidence it must be fair and easy to understand. The current scheme has changed very little since the mid-1970s and since then we have seen significant changes in our economy and the way people work.

‘The consultation which is now under way is designed to begin reforming the current scheme and adapting it to the needs of the Island in the 21^st century. I would urge individuals and organisations to get involved and help provide as comprehensive a picture as possible.’

The consultation and associated documents, which may be downloaded, can be found by visiting the Isle of Man Government’s online consultation hub at https://consult.gov.im/

For those unable to access the consultation hub, a paper version of the consultation can be requested by emailing consultation.ITD@gov.im @gov.im or calling 685400. 

The process will run for 12 weeks and conclude on Friday 7 October 2022.