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. Jersey is currently transitioning to a model of independent taxation, with the first group of Islanders moved from 1 January 2022 and an aim of everyone being transitioned by 1 January 2025.
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). Broadly, employees who had been on the island since before 2006 had ITIS deducted on a prior-year basis; however, for employees who have arrived on the island from 1 January 2006, ITIS was 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.
Prior year basis taxpayers are currently being transitioned into current year basis. Broadly, affected taxpayers' 2019 liabilities were 'frozen' with payments from 2020 and applied against current year liabilities. Two different payment options exist to settle the frozen 2019 liabilities.