Treasury Minister Alfred Cannan says that increasing personal allowances for the fourth time in four years was vital ’to get money back into people’s pockets’.

At the same time he said that increasing the tax cap again for the island’s very wealthy residents - from £175,000 to £200,000 - was the right thing to do.

Regarding personal allowances he told the Manx Independent: ’When we came in we were very conscious we were facing a challenge, a hangover if you like from the 2008 financial crisis, that we had to get money back into people’s pockets.

’That was our first and primary driver.

’I think all of us in Treasury, from a political perspective, were absolutely set on helping people feel that we were progressing, that we were with them and acknowledged the challenges.’

He said that in his first budget he began with a rise in personal allowances from £10,500 to £12,000 ’and then we have taken it up since then to £14,250’.

He said: ’This is driven by our own belief that actually, I guess we need to be competitive, but there were strong core society reasons why personal allowances needed to rise by the level that they have done.’

The Minister, who is MHK for Ayre and Michael, said it is estimated the fourth consecutive increase in personal allowances will lead to around 465 people being lifted out of the income tax net and put an extra £50 in the pockets of most taxpayers. But the rise - £250 - is below inflation, currently 2.6%.

The tax cap will be rising again for high net worth residents up to £200,000 from £175,000 last year.

Mr Cannan has previously said the measure was in line with his vision of an inclusive society and was also fair and proportional.

Mr Cannan told the Manx Independent: ’I am happy to confirm that there will be no more rises. But certainly under this administration we think we have done what was right to raise the tax cap.

’Clearly we also recognise that tax cappers do bring value to this island and they do create jobs and do create productivity within our nation’s economy.

’Our message is absolutely that they are very welcome but we wanted to make sure that the application of the tax cap is spread out and proportional and right for the circumstances that we are in today.’ It is estimated that there has been a slight rise, to more than 70 people using the tax cap. [The tax cap is an upper limit on the amount of income tax a high net worth individual would be expected to pay].

Mr Cannan was also asked if there had been any pressure over keeping the zero corporation tax.

He said: ’We very much recognise that this island has a reputation for providing business with a very stable and low tax economy.

’And there has been no pressure on us at all to raise corporate tax. There is some discussion going on across the EU that somehow corporate tax should be applied to all nations and that there should be a set level.

’Certainly for us we have set out to keep stability when it comes to corporate taxation and to help businesses, with for example the National Insurance holiday scheme, to give more incentive to come to the island.’

The Budget announced that the National Insurance Holiday Scheme for employees who move to the island for work is being continued.

That also includes Manx students who return to the island for empployment after completing their UK university courses.