Jersey islanders to pay tax on current year earnings

Islanders who started paying tax before 2006 will no longer pay a year in arrears

All islanders in Jersey will pay their tax bill based on their current yearly earnings from 2020.

The Prior Year Basis Tax Reform will see about two thirds of earners moved from an older system under which they pay their tax a year later.

States Members agreed to the Treasury Minister's proposition "in principle".

Deputy Susie Pinel denied accusations she had acted "in haste" and said the move would make the system "fairer" for all taxpayers.

About 45,000 islanders currently pay their tax in "arrears" under the Prior Year Basis (PYB).

Those under the system are paying for their 2019 tax liability through their 2020 earnings.

Deputy Pinel argued the system was problematic because it did not account for changes in a person's income.

"Where taxpayers' circumstances change and their incomes reduce, it can be difficult to pay a prior year's tax bill on a current year's income", she said.

'Last-minute'

Islanders who started paying tax after 2006 will have automatically joined on a Current Year Basis (CYB), with monthly payments taken by the government from their salary.

While States members have agreed to the move in principle, the finer details will still need to be ironed out and finally approved by the Assembly.

Mrs Pinel has suggested those currently on PYB should have their 2019 tax bill "suspended".

However, the States will still need to recoup this money, and the treasury minister has proposed the debt would need to paid by individuals "at some point" in their lifetime.

Scrutiny leader Constable Karen Shenton Stone criticised the plans, describing them as "last-minute" and "hastily produced".

Mrs Pinel told ministers the States would now have time to listen to the public, and draft the regulations "accordingly".

They are expected to be presented to the Assembly in January next year.