Jersey, Channel Islands
The Jersey tax year is the calendar year.
Tax returns are issued in January following the end of the tax year. The filing deadline for these returns is 31 May for paper filing and 31 July for electronic filing. A penalty of GBP 300 is imposed on returns filed late. Where a return remains outstanding after three months, a penalty of GBP 50 will be imposed every month the return remains outstanding, up to a maximum of nine months.
There is a joint tax return filing for married couples. The income of a married woman, living with her husband, is deemed to be that of her husband. A married woman is treated as living with her husband unless there is a permanent separation.
Payment of tax
Jersey income tax is calculated and collected via an income tax assessment. These are issued by the taxes office following the submission of the tax return form. The tax payment deadline is 30 November. Any tax unpaid at that date is subject to a surcharge of 10%. New legislation introducing late payment interest is expected imminently, and we are awaiting its enactment to confirm what rate this will be at.
For payment on account taxpayers, the first payment on account for the next year of assessment is made on 30 November alongside any balancing payment due. The second payment on account is due the following 31 May. This is based on the previous year's liability. For a person with no employment earnings, the amount payable is 50% of the previous year's liability. For a person whose earnings comprise 25% or less of their total income, the percentage is 40%.
There is a withholding tax (WHT) scheme in place that applies to employees. This is known as the Income Tax Instalment System (ITIS). Employees who have been on the island since before 2006 have ITIS deducted on a prior-year basis; however, for employees who have arrived on the island from 1 January 2006, ITIS is deducted on a current-year basis. Individuals who pay tax under the ITIS may also be required to make a balancing tax payment in December; however, the payment on account regime will not apply.
Last year following consultation, a proposal was put together to move all prior year basis taxpayers onto the current year basis This is based on two phases. On 4 November 2020, the States Assembly approved phase 1 of the proposal to move all taxpayers from a Prior Year Basis to a Current Year Basis of tax payment. Please note these changes only affect taxpayers that are currently on the Prior Year Basis of taxation. As a result of these changes, as of 1 January 2021, all taxpayers are on a current-year basis.
Phase 1 means that an individual’s 2019 tax liability will be 'frozen'. Payments made towards the 2019 balance, e.g.via Income Tax Instalment System (“ITIS”) payments, will be put towards the 2020 tax liability. Any balance remaining for the 2020 tax liability will be due by 30 November 2021. Revenue Jersey is encouraging earlier tax return filings to allow the correct ITIS rate to be applied as soon as possible. The 2020 tax return can be filed from 1 January 2021. The deadline for filing the tax return remains the same; 31 May 2021 for paper filings or 31 July 2021 for electronic filings.
Phase 2 will relate to the regulations governing the repayment of the frozen 2019 tax liability. Draft regulations were lodged in February 2021 for debate on 23 March 2021, which would, broadly, permit affected taxpayers to pay their 2019 liability over a period of 20 years or at retirement.