Taxation and contributions in Jersey ‘Jersey quickly went from an interesting alternative to a credible option and I made the initial move over from Hong Kong to begin setting up our Jersey office as our new European headquarters. It’s actually very difficult to think of anywhere else in the world that can so successfully combine a safe, family environment with such a sophisticated business infrastructure’
When it comes to relocating, Jersey is a popular choice for individuals, families and their businesses. A well-regulated and highly respected international jurisdiction with an excellent quality of life, Jersey is an environment where businesses and individuals can thrive.
We hope the following information and contacts will be useful as you start to navigate your way around our beautiful Island. The information and contacts are by no means exhaustive, so please feel free to call if you have any further questions. Locate Jersey +44 (0)1534 440604 locatejersey@gov.je
locatejersey.com Correct at the time of print - 04. 2022
A quick guide to tax and contributions in Jersey Tax or Contribution
Percentage Rate*
Personal Income Tax
20% maximum rate
High Value Residency Income Tax
20% on the first £725,000 of worldwide taxable income and 1% on income in excess of that amount 20% on any income from Jersey property 0% standard rate
Corporate Income Tax
10% tax for certain regulated financial services companies 20% tax for large retailers, utility companies and on the profits specifically arising from trading in Jersey from: 1) importation/supply hydrocarbon oils; 2) quarrying; 3) property development; and 4) property rental
Social Security Contribution - Employees (Class 1)
6% (capped at £285.84 per month) This contribution stops at pension age
Social Security Contribution - Self/non-employed (Class 2)
12.5% (capped at £1,019.50 per month)
Social Security Contribution - Employers
6.5% on earnings up to £4,764 per month, plus an additional 2.5% on earnings over £4,764 and under £21,724 per month
Long-Term Care Contribution (LTC)
This rate is currently 1.5% (capped a £3,910.32 per annum)
Goods And Services Tax (GST)
5% GST is charged on most goods and services
Capital Gains Tax (CGT)
0%
Inheritance Tax (IHT)
0%
Personal tax and contributions in more detail Personal tax* The standard rate of tax in Jersey is 20%. This is the maximum personal income tax you will pay in a year. Your tax is based on your total income but takes into account any allowances and reliefs you are eligible for. This rate also applies to the tax adjusted profits of sole traders and partnerships. There are no higher rate bands, Capital Gains Tax or Inheritance Tax. If you are an employee or a company director receiving a salary/fees you will have a regular deduction from your salary. This is called the Income Tax Instalment System (ITIS). You will receive an effective rate which shows your tax rate (as a percentage). This percentage is deducted from your gross pay every time you are paid. If you are in receipt of other sources of income you will be required to settle your tax liability on a payment on account basis. The tax year in Jersey is the calendar year. You will be issued with a personal tax return form in the January following the tax year end. Based on the information you provide within that tax return form, you will receive an income tax assessment and be advised of any further tax liability.
locatejersey.com *All rates are subject to review and may change on an annual basis. For up-to-date information please visit www.gov.je
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Personal tax and contributions in more detail (Continued) Tax and High Value Residency (HVR)* Individuals who qualify under Regulation 2(1)(e) of the Control of Housing and Work (Residential and Employment Status) (Jersey) Regulations 2013, are able to access the following tax rates: • 20% on the first £725,000 of all income • 1% on any income above that level • 20% on any income earned from land and buildings in Jersey, or dividends paid from a company in receipt of Jersey property income There is an annual minimum personal income tax contribution of £145,000 (this amount is subject to review in 2023). When applying for High Value Residency, you must be able to demonstrate comfortable and sustainable wealth (assets of £10,000,000) and sufficient taxable income to generate the annual minimum personal income tax contribution every year. The tax administration for a High Value Resident is the same as for other taxpayers.
Long-Term Care contribution* The Long-Term Care (LTC) scheme provides financial support to Jersey residents who are likely to need long-term care for the rest of their life, either in their own home or in a care home. A separate Long-Term Care fund has been set up to help those who need long-term care. Everyone who pays income tax pays into the Long-Term Care fund. The rate is currently 1.5%. This is capped at the Social Security Upper Earning Limit - so the maximum LTC contribution an individual will pay is £3,910.32. Your contribution is based on your total income but will take into account any allowances and reliefs you benefit from for tax purposes, so most people will pay less than 1.5%. Your contribution is calculated by Revenue Jersey (Taxes Office) and is collected in the same way as your income tax. There are no extra forms and the amount is shown separately on your tax bill.
Social Security contribution* Contributions are payments that employees and employers make by law, they are split into Class 1 and Class 2. Class 1 liability relates to employed contributions which are split between employee and employer. Class 2 liability is basically the absence of employed contributions i.e. self-employed, non-employed, etc. Social security contributions go towards contributory benefits such as: • Short-term Incapacity Allowance • Long-term Incapacity Allowance • Maternity Benefit • Home Carers Allowance • Old Age Pension/Survivors Allowance and Death Grant
locatejersey.com *All rates are subject to review and may change on an annual basis. For up-to-date information please visit www.gov.je
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Personal tax and contributions in more detail (Continued) Who must pay contributions You’re liable to pay contributions if you are: • living in Jersey • over 16 (if working) • between 18 and pension age This means that you’re liable for contributions even if you are: • studying • looking after a family • not working If you haven’t been registered in Jersey before and you don’t work for an employer, you don’t have to pay contributions straight away. Once you have been in the Island for six months you’ll have to start contributing. If you’ve already been registered in Jersey previously you’ll be liable for contributions as soon as you arrive in the Island.
Class 1 and Class 2 contributions* CLASS 1 You pay Class 1 contributions if you are employed for eight hours or more per week, based on how much you earn. From January to December 2022, 6% is deducted from your wage each month (capped at £285.84). 6.5% is paid to the States of Jersey by your employer (on earnings up to £4,764 per month, plus an additional 2.5% on earnings over £4,764 and under £21,724 per month*). You have to meet the lower earnings threshold of £1,016 (in 2022) to cover your Class 1 liability in full for pension and benefit purposes. This contribution stops at pension age. CLASS 2 You pay Class 2 contributions if you’re not employed. This includes people who are: • self-employed • students • looking after a family • not working The maximum rate is 12.5% (capped at £1,019.50 per month). The amount you pay is worked out from your total income two years previously and rates vary depending on your total income and circumstances. Depending on your circumstances (i.e. studying or looking after young children) you may be able to apply for contribution credits which protect your Social Security record. They also protect your entitlement to certain benefits. Full information about Social Security contributions is available here: www.gov.je/working/contributions/payments For more details about registering for Tax and Social Security as a Jersey resident please go to: www.gov.je/lifeevents/movingtojersey
locatejersey.com *All rates are subject to review and may change on an annual basis. For up-to-date information please visit www.gov.je
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Business taxes in more detail Corporate income tax* The standard rate of corporate income tax in Jersey is 0%. The exceptions to this standard rate are: • certain regulated financial service companies (as defined in the Income Tax Law) which are taxed at 10% • utility companies which are taxed at 20% • retailers in Jersey (with retail turnover of £2m and above) where tax is charged: 1) at 0% where profits are less than £500k; 2) on a sliding scale from 0% to 20% where profits are between £500k and £750k: and 3) at 20% where profits exceed £750k • Income specifically derived from trading in Jersey from: 1) the importation and/or supply of hydrocarbon oils; 2) quarrying; 3) property development; and 4) property rental, is also taxed at 20% The tax year is the calendar year (‘the year of assessment’). The basis upon which trading income is charged to tax is the accounting period ending in the year of assessment. All companies are required to file an annual tax return. The company tax returns are completed online and must be submitted by 31 December in the year following the year of assessment. The information a company is required to provide on the tax return is dependent on the circumstances of each company. Companies which are subject to a positive rate of tax will receive an annual notice of assessment in the year following the year of assessment. Tax which is due is payable immediately. There is a surcharge penalty of 10% in respect of any tax which is not paid by early December of the year following the year of assessment. For more details about Jersey’s corporate income tax, visit www.gov.je/taxesmoney/incometax/companies
Goods and Services Tax (GST)* The Goods and Services Tax (GST) is a tax on sales of goods and services supplied in Jersey for local use, including imports. There are three categories under GST, and all goods and services are placed into one of them: • standard-rated • zero-rated • exempt It is collected at each stage of production, manufacture, distribution and sale, where the supplier is registered for GST, visit www.gov.je/taxesmoney/gst/gstcustomers STANDARD-RATED
There are two types of goods and services that aren’t standard rated: referred to as zero-rated and exempt supplies. ZERO-RATED These are taxed at 0%. Examples include: • exports of goods • housing • medical prescriptions • international services EXEMPT SUPPLIES
These are goods and services that are taxed at a standard rate (5%) of their total value at the point of sale. Almost all goods and services provided in Jersey (including goods purchased online that are worth £135 or more – including freight) attract GST at the standard rate.
These are not taxed for public policy reasons, or because they are difficult to tax accurately. Examples include:
Examples include:
• financial services
• goods that you buy from a shop • food and drink from a restaurant or bar
• insurance • postal services
• services, such as hairdressing or hotel accommodation
• medical and paramedical supplies made by registered professionals or institutions
• imported goods that you buy online
• supplies by charities
• rented or hired goods, such as a car or equipment
locatejersey.com *All rates are subject to review and may change on an annual basis. For up-to-date information please visit www.gov.je
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Business taxes in more detail (Continued) GST for customers* Q: Is GST collected on goods I buy online or overseas and have couriered into Jersey? Yes, you must pay GST on all goods worth £135 or more (including freight costs). You have 3 days from when the goods arrive in Jersey for you or your supplier to declare the value and pay any GST owed. Any goods you import by freight are detained by the shipper until you pay the duty. If you don’t pay within 3 days this will significantly affect how long it takes to clear your goods through Customs. Three different duties and taxes are collected on imported goods: 1. Excise duty. Charged on alcohol, tobacco and fuel 2. Common Customs Tariff (CCT). This is charged on all goods imported from outside the Customs Union To find out how much you will need to pay visit Trade Tariff on www.gov.uk/trade-tariff 3. GST (5%) on the combined value. If the combined value of your goods is over £135, you must declare and pay the GST and any excise duties (if applicable) This includes: − the purchase price/goods value at import − commission, packing and freight − all taxes and duties applied before and on arrival, such as VAT, CCT and excise If you order multiple items that arrive as one shipment on the same day, this is treated as a single delivery for customs duty purposes. Full information on importing goods and paying duties and taxes is available here: www.gov.je/taxesmoney/gst/gstcustomers
Q: Do I have to declare items that I have purchased outside of Jersey and which I am bringing back in my luggage? If you’re on a commercial flight or ferry and the total import value of the goods is £390 or more then go to Customs’ ‘red point’ at the port and speak to an officer. If you’re on a private flight or ferry and the total import value is more than £270 then make a voluntary declaration.
Q: Do I have to pay GST and duty if I buy a car from outside of Jersey and ship it over? If you import a vehicle from within the Customs Union, you’ll need to pay GST at 5% on the value of the vehicle at import. This includes all freight charges and insurance costs. If you import a vehicle from outside the Customs Union, you’ll need to pay GST at 5% and you may be liable to pay the Common Customs Tariff (CCT). Go to www.gov.uk/trade-tariff to check duty rates. You will not be able to register the vehicle with Driver and Vehicle Standards (DVS) until Customs have cleared the vehicle and you’ve paid the relevant duties (e.g. Vehicle Emissions Duty).
Q: Do I get charged GST on the VAT I pay on goods imported from the UK? Yes, VAT is considered part of your goods’ total value, and you must pay GST on the total value to have the good released from Customs. If you can show that the VAT has been refunded to you, the GST on the VAT will also be refunded.
locatejersey.com *All rates are subject to review and may change on an annual basis. For up-to-date information please visit www.gov.je
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Business taxes in more detail (Continued) GST for businesses* You must register for GST if: • your business has made taxable supplies of £300,000 or more in the preceding 12 months. (Taxable supplies include goods and services that are taxed at both the standard and the zero-rate for GST - if the turnover from these goods and services was £300,000 then you should register) • there are reasonable grounds to believe that the value of your taxable supplies in the coming 12 months is likely to exceed £300,000
Q: I only make sales of goods that are zero-rated, can I apply to be exempt from GST? Yes, If your company only makes zero-rated sales, you can apply to be exempt from registering for GST. If your company is exempted from registering, you won’t be required to complete GST returns or charge GST on the supplies you make. However, you won’t be able to recover any input tax or import tax that you are charged by other companies.
Q: I only make sales of goods that are exempt from GST, do I need to be registered? No, if the only supplies of goods or services you make are exempt, you don’t need to register for GST. If you have an established business in Jersey which makes supplies of less than £300,000 in any 12 months, you can apply for voluntary registration. Being registered voluntarily means you can recover any GST you incur on purchases and expenses for your business. You will, however, have to charge GST on the supplies you make and maintain books and records. Before you apply for voluntary registration, you should carefully consider whether it will be beneficial to your business and discuss it with a professional tax advisor. More information is available here www.gov.je/taxesmoney/gst/businesses
Practical information on moving to Jersey with your personal possessions, pets, etc. Is available in a separate factsheet entitled ‘Useful information for moving to Jersey’.
Useful links COMPANY TAX IN JERSEY www.gov.je/taxesmoney/incometax/companies
INCOME TAX IN JERSEY www.gov.je/taxesmoney/incometax
SOCIAL SECURITY IN JERSEY www.gov.je/working/contributions
locatejersey.com *All rates are subject to review and may change on an annual basis. For up-to-date information please visit www.gov.je
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Useful Contacts FOR ALL ENQUIRES REGARDING: INCOME TAX PASSPORT, CUSTOMS AND IMMIGRATION PLANNING AND BUILDING SERVICES SOCIAL SECURITY CONTRIBUTIONS TREASURY AND CASHIERS CUSTOMER AND LOCAL SERVICES T: +44 (0)1534 444444 E: customerservices@gov.je Philip Le Feuvre House, La Motte Street, St Helier, Jersey, JE4 8PE
BUSINESS TAX HELPLINE T: +44 (0)1534 440300 E: bustax@gov.je
BUSINESS GST HELP DESK T: +44 (0)1534 440555 E: gst@gov.je
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