Government defends tax plans after criticism

Emma-Jayne Blackman - BBC News, Jersey
2 min read
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money
The minister responsible for Treasury and Resources insists people will not be worse off [BBC]

Jersey’s government has responded to criticism of plans to tax islanders independently following claims the changes will leave some people worse off.

Everyone in Jersey will receive an independent tax assessment from 2027 - although some couples will be able to continue filing a joint tax return following a States decision to shelve plans to force everyone to fill out their own form.

Deputy Elaine Millar, Minister for Treasury and Resources, said in the States people would not be worse off as a new compensatory allowance would be introduced.

But those who moved to the island, got married or entered a civil partnership after 1 January 2022 will not benefit from the compensatory allowance and will be taxed independently.

Man in office
John Shenton said younger generations would not qualify for the compensatory tax allowance [BBC]

Jersey tax advisor John Shenton said the new system "erodes family values" for young people.

"Under the current proposals, the youngsters of today who decide to stay here, marry, and raise a family will never be able to benefit from the compensatory allowance so will face higher taxes, which makes the island an even more expensive place to live,” he said.

"The government has always said that they're putting children first but this policy clearly doesn't put children first at all."

The Treasury and Exchequer Department said: "Independent taxation largely removes all forms of discrimination in the tax system be that on the basis of gender, age or marital status.

“Independent Taxation will support both married and co-habiting people bringing up children more equally (with Income Support available for those on lower incomes and additional support for those with certain caring responsibilities).

“The tax system continues to provide specific tax allowances to help with the upbringing for children and generous tax relief in respect of childcare.”

'No longer needed'

The department said the compensatory allowance was “likely to be in place for around 15 to 20 years until such time as Single Person’s Allowance outstrips the current Married Man’s Tax Allowance”.

It said: “In the short term, the introduction of Independent Taxation is expected to cost the Exchequer an additional £4m yearly.

“In the much longer term (15 to 20 years), given that most spouses or co-habitees do now work to some extent (even when bringing up children), additional taxes will be generated once the Compensatory Allowance is no longer needed.”

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