It had been envisaged within
the Government Plan 2020 - 23 that a review of PYB taxation would be combined with
awaiting changes to the existing taxation system such as independent taxation
and would be rolled out during the life of the Government Plan 2020–23.
Around two-thirds of
non-corporate taxpayers are currently classified as Prior Year Basis (PYB)
taxpayers and pay income tax one year in arrears.
As part of Government thinking
on post-pandemic fiscal stimulus measures, the Minister for Treasury and
Resources (the Minister) has proposed that the taxation review should be
accelerated with a view to abolishing PYB payment retrospectively for the 2020
year of assessment.
Proposals have been lodged by the
Minister on the 22nd September 2020 confirming that if adopted the
PYB taxpayers’ 2019 liability would be “suspended” and would be repayable by
PYB taxpayers over a period of years (earliest 2023) and a range of repayment
options would be offered. All taxpayers’ 2020 tax liabilities would be paid on
a current-year basis, calculated in 2021 following receipt of the 2020 tax
The PYB will be debated by the
States Assembly on the 3rd November 2020. If adopted by the States
Assembly this would require an Amendment to the Income Tax (Jersey) Law 1961,
to be lodged and effected by Acte Operatoire before the end of November 2020.
To conduct detailed scrutiny of the
proposals set out in the Council of Minister’s Report and propositions lodged
by the Minister of Treasury and Resources:
a) To assess overall appropriateness and deliverability
against strategic priorities.
b) To consider any disparities between the Minister’s
statement within the Government Plan 2020 – 2023 versus the proposals.
c) To ensure the proposals meet the criteria as set out in
the Government Plan 2020-2023.
To consider the implications of the proposals on public finances:
a) How possible deficits could affect the State’s
b) To review the impact, if any, of late tax returns
and their effect, if any, on the CYB income process.
c) To review the States costings [when available] and
to consider the fiscal soundness of the proposals and their potential impacts
on the lack of revenue.
To consider fairness and transparency:
a) To consider the consultation process and
information provided to taxpayers.
b) To ensure the proposals simplify the tax system and
make it fair and equitable.
c) To analyse how the payment of tax arrears will
affect the taxpayer and ensure the impact of the proposals on the taxpayer have
been fully taken into account.
d) To ensure the views of key stakeholders are
captured and taken into account during the review.
To consider repayment of 2019 PYB Income tax:
a) To analyse repayment terms and what “possible”
interest free means.
b) To review what minimal interest means and how this
will be calculated.
c) To consider any potential economic impact of the
To consider administration and process:
a) To review if the Minister has taken other changes
to the tax system into account which may affect household income (Independent
taxation in 2022, abolition of mortgage relief in 2025).
b) To have a clear understanding of the proposed
changes to the Departmental systems and any contingency plans the Department
has in place, should there be any delays or unexpected complications.