Jersey Revenue Extends Tax Deadline for 26,000 Islanders and offers x3 payment options

Historically, Jersey taxpayers paid tax on a Prior Year Basis of Taxation (PYB); this meant the tax paid in a said tax year was allocated to the previous tax year. For example,

• Tax paid in 2018 was allocated to the 2017 tax liability.

For those who registered for tax in 2006,

• A new system was set up that meant these taxpayers paid on a current-year basis of Taxation (CYB).

The new system meant that tax paid in a said tax year was allocated to that year. For example,

• The tax paid in 2006 was allocated to the 2006 tax liability.

The tax system has continued running a mix of PYB and CYB taxpayers for many years since the changes made in 2006.

On 4 November 2020,

• The States Assembly agreed that all PYB taxpayers would change to a current-year basis (CYB), namely Pay as you Earn (PAYE). Therefore aligning all registered taxpayers.
• For any PYB taxpayers, this change meant all taxes paid in 2020 initially allocated to the 2019 tax liability were re-assigned to the 2020 tax liability instead.
• For PYB taxpayers, no tax payments have been allocated against their 2019 liability.
• This has left a lot of PYB taxpayers with a 2019 ‘frozen’ tax liability until it is paid off separately.

To recover the 2019 ‘frozen’ tax liability, Revenue Jersey

• Understood that this debt could not be payable immediately and issued three payment options.
• Taxpayers originally had until 30 September 2024 to decide which option applies and make an election.
• Jersey taxpayers now have until 30 September 2026 to decide which payment option to choose.

THE X3 OPTIONS ARE AS FOLLOWS

1. You agree on a payment plan with Revenue Jersey.
1. The plan starts in 2027 and you can spread the payment of your 2019 tax over any number of years up to a maximum of 17.

i. Although the plan can be agreed upon and implemented now.

2. You can pay by direct debit or make periodic payments depending on whether your income varies from month to month,

i. But you must complete a minimum of 1/17th payment each year if making periodic payments –

ii. The final date is 31 December 2043,

2. You can pay a lump sum payment by 30 September 2026 (either as one lump sum or a series of payments) or
3. You can commit to paying on your retirement (only available if you have not yet reached pensionable age) – with this option,
1. You will need to declare that you have a financial investment product or
2. An asset that will give you the means to pay your liability within 12 months of you reaching pensionable age.

In exceptional circumstances and if retired, you can apply to defer any balance due to be paid from your Estate.

Please note: the start of the scheme has been deferred from 2025 to 2027 and is subject to States approval

SOURCE

• https://brackenrothwell.com/insights/2019-frozen-tax-liability/
• https://www.gov.je/Government/Departments/TreasuryExchequer/RevenueJersey/pages/index.aspx
• https://linkscan.io/scan/ux/aHR0cHM6Ly9icmFja2Vucm90aHdlbGwuY29tL2luc2lnaHRzLzIwMTktZnJvemVuLXRheC1saWFiaWxpdHkv/573B93677F5BB03DD152101E152939CE02C21FBED5C02B5ABEFC957B4AC2BC27?c=1&i=1&docs=1