Two thirds of Jersey taxpayers could pay back 2019 bill over 20 years

People in Jersey who currently pay their taxes in arrears could have the option of two repayment plans for their outstanding bill.

Earlier this year, the Treasury Minister put forward plans to move all Jersey taxpayers to Current Year Basis (CYB), or pay as you earn.

Deputy Susie Pinel said the decision was made to assist those whose incomes have been reduced as a result of the pandemic.

At the moment some 45,000 islanders - roughly two-thirds - are paying tax in arrears, also known as Prior Year Basis (PYB). Moving those islanders from PYB to CYB would mean their 2019 tax bill is frozen and payment delayed.

The original plan was to pay the frozen bill off over a period of 5 to 10 years from 2023.

But plans have been redrafted after reaction from the public and ahead of the States Assembly debate on the plans next week.

How would the system work?

PYB taxpayers will be able to choose one of two repayment options.

Option 1

A payment plan that can span 20 years. The first payment does not need to be made until 2025 but can begin from 2022.

The payments would be expected at least annually and could be paid either through the ITIS system or via direct debit.

Any islanders who wanted to clear up their tax liability faster would be given the option to overpay and there would also be an option of a 'payment holiday' of as much of a year if there was a change in their financial circumstances. No affordability test would be required in this instance.

Option 2

A deferred payment plan to settle the 2019 bill.

Islanders can use their existing arrangements to pay off their tax bill for 2019 when they become eligible for a States Pension.

The full 2019 tax bill would need to be paid within 12 months of reaching States Pension age.

If the plans are approved by the States, payment regulations will be published before the end of 2020 ahead of a debate in early 2021.