Jersey proposes to scrap taxation in arrears to help those worst hit by the pandemic

Jersey's Treasury and Resources Minister is proposing to move all Jersey tax payers to Current Year Basis (CYB), or pay as you earn, in order to assist those whose incomes have been reduced as a result of the pandemic.At the moment some 45,000 islanders are paying tax in arrears, also known as Prior Year Basis (PYB). Paying in arrears can create problems for those whose circumstances change, and find themselves unable to pay on the basis of what they earned the previous year.The intention to move all islanders onto CYB was announced in last year's Government Plan, but has been accelerated due to the impact of Covid 19.Under the proposed measures everyone who is paying in arrears, would be moved to CYB.

What that means in practice is that all tax payments made for 2020, at the end of the year would be used to pay off 2020's tax bill. Their 2019 tax bill would be frozen until 2023, when they would start paying into a repayment plan, the details of which are still being developed.  Employed islanders who started paying tax from 2006, will not be affected by the changes, as they are already paying as they earn.

Jersey's Minister for Treasury and Resources says she has asked officials to "accelerate the work surrounding abolishing PYB" from this year onwards.

Ultimately the measure is intended, she said, to "put more money in many Islanders pockets in the short-term", which it is hoped will help stimulate the island's economy during the recovery period.All tax payers will receive information by post in the next week, with further details on the proposed changes.Islanders will also be able to have their say on the proposals in a survey being launched on 3 August 2020. The survey can be completed online and paper copies will be available at Parish Halls, the Library and Citizens Advice.The proposals, which will require the Income Tax (Jersey) Law 1961 to be amended, will be debated by the States in October.