Taxation in Jersey
Exemption thresholds apply to those on lower incomes and tax reliefs exist for married couples, single parents, child day care and children.
Since 1928, married couples were required to file tax receipts under their spouse's name, married women's earning were considered part of their spouses' earnings and male permission was required for women to be treated separately or to discuss her financial affairs with the tax office.
In 2020, a vote in the States Assembly (40 pour, 2 abstentions) to reform the law to give both marriage partners equal rights over the couple's tax affairs passed to come into force from 2021.
[11] Historically, no value added tax (VAT) was levied in Jersey, with the result that luxury goods have often been cheaper than in the UK or in France.
[12] To try to prevent islanders living below the poverty line, the States of Jersey introduced an Income Support service in January 2008.
It is charged at a much lower rate than UK or French VAT, so Jersey can still act as a low-tax shopping jurisdiction on certain items.
For example, no VAT is charged on female sanitary products (the so-called 'tampon tax') in the UK[13] while GST still applies in Jersey.
It will affect the island and take a number of years to implement, meaning Jersey's "zero-ten" tax policy will no longer be possible.
[17] Former Senator Ben Shenton said the zero-ten system was nearing its "sell-by" date and the zero percent rate was reinforcing Jersey's image as a tax haven.
[18] Taxes are charged on road fuel, vehicles, alcohol and tobacco and are similar to UK excise duties.
According to the Tax Justice Network, Jersey suffers from the "finance curse", a term used to describe a low-tax jurisdiction's overreliance on the finance sector (which accounts for over 50% of the island's GVA and directly accounts for 25% of the island's jobs) and a lack of a viable alternative development strategy.
[22] Even in the modern day, Jersey continues to encourage high-wealth individuals to settle in the island to take advantage of lower tax rates.
Jersey's situation between France and England meant that Jerseymen took up smuggling of goods into French and English ports.
[23] In the 1920s, high net worth individuals from Britain would emigrate to the island (or simply shift their wealth there) for tax purposes.
[26] A large proportion of the financial services conducted in Jersey are tax-driven, meaning they are booked there without the requirement of adding value.
[29] Jersey's finance industry featured in a BBC Panorama documentary, titled "Tax me if you can",[30] first broadcast on 2 February 2009.
[41] However former Chief Minister Terry Le Sueur, has countered these criticisms, saying that "Jersey [is] among cooperative finance centres".
[46] A report by Capital Economics Ltd., commissioned by Jersey Finance found that the island is a conduit for around £500 billion of foreign investment in the UK.
[47] The Social Security department introduced a Back to Work programme to deal with the job losses and Jersey Post had to suffer significant cut-backs in response to a reduction in fulfilment.
As a result of the new rule, the UK tax authorities reported a 200% rise in import VAT from the Channel Islands, estimated at £95 million per year.
