The Isle of Man Medical Society has welcomed the Government’s decision to abandon plans for a 2% health levy.

Treasury confirmed last week that the charge, proposed earlier this year to help meet rising health and social care costs, will not be introduced by the current administration.

The measure would have imposed a 2% charge on residents by 2027-28, separate from income tax, to fund services run by Manx Care and the Department of Health and Social Care. A cap of £5,000 per individual had been suggested.

A consultation launched in March attracted more than 3,800 responses. Treasury Minister Dr Alex Allinson said the process provided an opportunity to gauge public opinion on the proposals, which had followed a commitment in the 2024 Budget and associated Tax Strategy.

He said: ‘The increased financial and demand pressures on our health and social care services are well documented and the island is clearly not alone in examining how it can sustain vital frontline services into the future.

‘The consultation gave us the opportunity to gauge public appetite following a commitment in the 2024 Budget and associated Tax Strategy to look at additional ring-fenced income to fund these services.’

In its announcement, Treasury said only ‘high-level options’ for an NHS Levy had been assessed and these would not now be brought forward by the present administration.

Dr Allinson added that Treasury is working with the health department and Manx Care on a specialist financial recovery programme designed to complement the existing cost improvement programme. He said this would focus on value for money, community-based services and long-term reform.

He also acknowledged the concerns raised through the consultation process. ‘Questions and concerns regarding any proposed new NHS funding stream were inevitable, and the consultation has been useful in clarifying thinking that will help inform options in the future. I would like to thank everyone who took the time to share their views with us.’

The levy had been proposed as a replacement for last year’s 2p rise in the higher rate of income tax, which was intended to raise £20 million for health services. That increase was reduced by 1p in this year’s Budget. Dr Allinson had previously said the change to income tax was always intended as a temporary measure.

Options outlined in the consultation suggested the levy could have applied to income normally exempt from tax, including war pensions, retirement lump sums, benefits in kind and TT Homestay income. It asked whether social security payments such as Jobseeker’s Allowance, Incapacity Benefit and Employed Persons Allowance should also be brought within scope.

Responding to the Government’s decision, the Isle of Man Medical Society said the move demonstrated a constructive response to the concerns of professionals and the public.

Dr Vineet Varshney, Honorary Secretary of the Society, said: ‘We commend the Government for listening to the concerns of the medical profession and the public. This decision reflects a commitment to fairness and to ensuring that healthcare remains accessible to all.

‘The Society looks forward to working collaboratively with policymakers to strengthen services and deliver long-term improvements for patients and professionals alike.’

The Society said it remained committed to engaging with Government to ensure that future reforms prioritise patient outcomes, professional wellbeing and the resilience of the Island’s healthcare system.

The full consultation response will be published in due course.