It is essentially the usual mixed bag – and here it is at a glance.
Good news for married couples
Married couples are set to receive an extra £850 of their income tax free – a move which could save 12,000 households an additional £221 on average each year.
The second-earner’s allowance is given to the lower-earning partner where both are earning.
Currently, co-habiting couples are each entitled to single-person tax exemption – which could total as much as £28,800 between them. But for married couples the current tax exemption is £850 less when including the second-earner’s allowance. That will change if the Budget proposals are passed next month.
But not so good news for drinkers and smokers
Here are the proposed duty increases:
- Unleaded petrol/diesel: 2.5 per cent increase, the equivalent of 0.1p per litre.
- Pint of normal strength beer/cider: 2.5 per cent increase
- Bottle of table wine: 2.5 per cent increase
- Litre of spirits: 2.5 per cent increase
- Packet of 20 king-size cigarettes: 7.5 per cent increase
- l50 grams of hand-rolling tobacco: 10 per cent increase
And there could be a new tax for large retailers
Currently retail companies pay no tax on the profits they make in the Island and this new business charge would capture both companies owned locally and those owned elsewhere, including the bigger UK retail chains.
The tax would apply to retailers with taxable profits of £500,000 or more a year and it is expected to affect 20 companies, five of which are owned locally. The amount of tax would be charged on a sliding scale, from those with profits of £500,000 up to a threshold profit of £750,000, at which point the retailer will be charged the full 20 per cent.
Changes afoot for the super-rich
Three changes would apply for wealthy people coming to live in Jersey from 1 January 2018 who qualify for preferential tax status (previously known as 1(1)k residents), if the Budget is approved.
- The minimum amount of tax they are expected to pay annually will increase by £20,000, up from £125,000 to £145,000. This is based on an expected taxable income of at least £725,000 a year. Income over that threshold will continue to be taxed at the existing preferential rate of one per cent.
- Under the existing regime, if a high-value resident does not have sufficient income to meet their expected annual minimum liability, there is no mechanism in place to enable them to pay more tax. The new regime introduces a ‘top-up’ procedure that will ensure that all newly-arrived residents will pay their expected minimum tax contribution.
- The annual minimum amount will in future be reviewed every five years.
Financial services
Two new measures are being introduced in the finance sector.
- The definition of ‘financial services company’ – which requires payment of ten per cent tax on company profits under zero-ten – will be widened to include firms providing credit and financing, general insurance brokers and businesses, and registrars.
- Companies that qualify to pay their annual GST in a lump sum – known as ‘international service entities or ISEs’ – will be charged higher fees.
It’s not all about taxes and charges…
The Budget sets out a total of £58 million in capital spending projects.
A total of £21 million would be invested in the Island’s schools, including projects to renovate St Mary’s Primary School and improve facilities at Grainville.
Meanwhile, the Infrastructure Department is set to receive an additional £19 million to fund improvements. Money would also be spent on improving the prison and moving health services from Orchard House to the Hospital.
