NASUWT Pay Bulletin January 2020

Summary

The request sought verification of tax and national insurance liabilities for teachers in the Isle of Man compared to the UK based on a NASUWT Pay Bulletin. The Treasury disclosed detailed calculations confirming that tax and NI liabilities are generally lower in the Isle of Man for the specified pay scales.

Key Facts

• The Treasury provided comparative tax and National Insurance calculations for three teacher pay scales: £35,971, £40,490, and £63,975.
• For all three pay levels, the total tax paid in the Isle of Man was lower than in the United Kingdom.
• National Insurance contributions were also lower in the Isle of Man for the highest pay scale (£63,975) compared to the UK.
• The response was delayed until May 2020 due to the government's priority response to the coronavirus pandemic.
• The calculations assumed a single person with no additional allowances and pension contributions as per the bulletin.

Data Disclosed

• £35,971
• £40,490
• £63,975
• £3,060.80
• £3,846.20
• £7,937.60
• £3,242
• £3,739
• £4,002
• £4,075.40
• £4,820.60
• £10,198.40
• £3,281
• £3,823
• £5,246
• 2020-02-13
• 2020-05-05
• 1179549

Original Request

The NASUWT Isle of Man Pay Bulletin for January 2020 contains information regarding tax, national insurance and pension liabilities for teachers on various pay scales (M6, U3 and L19). Noting that the reported burden in respect of some of these is greater in the IoM than the UK for what information (if any) does the Department hold to substantiate or contradict the figures given in respect of these liabilities? The Pay Bulletin can be found online at: https://www.nasuwt.org.uk/uploads/assets/uploaded/0f387282-9186-410a-a76b702819734eee.pdf 08/03/20 - resources unavailable to work through qualified exemption owing to Govt.s response to the coronavirus pandemic being finalised.

Data Tables (10)

Full Response Text

APPENDIX Calculations

Isle of Man – Tax calculations

Assumptions
 Taxed as a single person  No additional allowances  Pension paid at the rate provided in the pay bulletin table  First £6,500 paid at 10% rate

Gross Pay (annual) 35,971 40,490 63,975 Less Pension (3,417) (4,009) (7,037) Less Personal allowance (14,000) (14,000) (14,000) Taxable pay 18,554 22,481 42,938

Amount of pay subject to 10% tax 6,500 6,500 6,500 Amount of pay subject to 20% tax 12,054 15,981 36,438

Total Tax paid at 10%
650 650 650 Total Tax paid at 20%
2,410.80 3,196.20 7,287.60 Total tax paid 3,060.80 3,846.20 7,937.60

Isle of Man – NI calculations  lower earnings limit of £6,500 (pay 0% up to £6,500)  upper earnings limit of £40,768 (pay 11% up to £40,768)  pay 1% on everything above that Gross Pay subject to NI 35,971 40,490 63,975

Amount of pay subject to 0% NI paid 6,500 6,500 6,500 Amount of pay subject to NI paid at 11% 29,471 33,990 34,268 Amount of pay subject to NI paid at 1% - - 23,207

Total NI paid at 11% 3242 3739 3,770 Total NI paid at 1% - - 232 Total NI Paid 3242 3739 4002

United Kingdom – Tax calculations

Assumptions
 Taxed as a single person  No additional allowances  Pension paid at the rate provided in the original table  Earnings between £12,500 up to £50k charged at 20% (i.e. up to £37,500)  Earnings between to £50k to £150k charged at 40%

Gross Pay (annual) 35,971 40,490 63,975 Less pension (3,094) (3,887) (7,229) Less personal allowance (12,500) (12,500) (12,500)

20,377 24,103 44,246

Amount of pay subject to tax at 20% 20,377 24,103 37,500 Amount of pay subject to tax at 40%

6,746

Total Tax paid at 20% 4075.40 4820.60 7,500 Total Tax paid at 40%

2698.40

4075.40 4820.60 10,198.40

United Kingdom – NI calculations  lower earnings limit of £8,632 (pay of 0% up to £8,628)
 upper earnings limit of £50,024 (pay of 12% up to £50,024) Gross Pay subject to NI 35,971 40,490 63,975

Total pay subject to 0% NI 8,632 8,632 8,632 Total pay subject to 12% NI 27339 31858 41392 Total pay subject to 2% NI - - 13,951

Total NI paid at 12% 3,281 3,823 4,967.04 Total NI paid at 2%

279.02

3,281 3,823 5,246.06

Freedom of Information Seyrsnys Fysseree

The Treasury Government Office, Douglas Isle of Man, IM1 3PU

Telephone: (01624) 685605 Email: FOI.Treasury@gov.im

Government Website: www.gov.im

Our ref: 1179549 5 May 2020

Dear ###

Thank you for your request that was received on the 13 February 2020 and for the clarification you subsequently provided. Thank you also for your patience in awaiting your response, which has been delayed owing to the priority given to Government’s response to the ongoing pandemic. Your request, subject to the clarification you provided, asked as follows - The NASUWT Isle of Man Pay Bulletin for January 2020 contains information regarding tax, national insurance and pension liabilities for teachers on various pay scales (M6, U3 and L19). The Pay Bulletin can be found online at: https://www.nasuwt.org.uk/uploads/assets/uploaded/0f387282-9186-410a- a76b702819734eee.pdf Please could you advise the tax and national insurance that a teacher would pay in respect of each pay level (£35,971; £40,490 and £63,975), both in the Isle of Man and in the United Kingdom in order that the figures provided in the pay bulletin can be confirmed or refuted. I am pleased to provide the tax and national insurance figure for each of the pay levels specified in the tables below. The calculations to these figures are found in the appendix to this response. Isle of Man Gross Pay (annual) 35,971 40,490 63,975 Tax 3,060.80 3,846.20 7,937.60 National Insurance 3,242 3,739 4,002

United Kingdom Gross Pay (annual) 35,971 40,490 63,975 Tax 4,075.40 4,820.60 10,198.40 National Insurance 3,281 3,823 5,246

Please quote the reference number 1179549 in any future communications.

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Yours sincerely