Not enough manpower or money in Revenue Jersey to change tax laws, claims report

Jersey's tax department has not got the manpower, systems or money to cope with moving taxpayers to paying based on their current year's earnings rather than the previous year, according to a scrutiny review. The Corporate Service Scrutiny Panel is also concerned the changes would unfairly affect couples who divorced or dissolved their civil partnership during 2019, as the husband, or 'Spouse A' would still be liable for the whole year's bill.

The report claims it remains unclear as to how this will be split when independent taxation is brought into force or if a couple divorce before it is implemented.

More than 30,000 taxpayers would be affected by the changes, which would see £348 million recovered.

The consultation highlighted concerns among those who would need to repay the frozen 2019 liability, and focus groups gave feedback which supported those fears.

As a result, the initial proposals were substantially revised to provide a longer time period of 17 years, during which the 2019 liability would be payable, and also to address concerns of those affected who are currently in retirement with limited and fixed annual income.

The total amount owed by nearly 9,000 retirees is estimated at £70 million or 21.1% of the total liability due. The average debt per person or couple is therefore £7,898, meaning that payments of £463.58 per year would be due or almost £39 per month.

There are around 3,034 people and couples within five years of retirement age, and their average 2019 liability is £11,041. They would be liable to pay £649 per year towards their 2019 liability, or £54 per month.

The panel also found that the proposed regulations for deferred 2019 liability have been significantly revised since October last year. It says while an extension from 17 to 20 years for the repayments would make it more manageable for taxpayers, 'it will have a significant impact on the management of Government expenditure and increases the risk that some of the due amount will not be recoverable'.

During today's (23 March) debate in the States' Chamber, politicians will be asked to consider two amendments to the proposed changes.

First, the Scrutiny Panel wants a review in a decade to see whether the repayment schedule is working.

The second amendment seeks to adjust part of the regulations which does not recognise that a taxpayer unable to pay the 2019 liability 12 months after reaching pensionable age, may have already made payments towards the liability.