05/10/17

Jersey Budget Raises Taxes on Companies, HNWIs

LowTax -- Jersey's 2018 Budget proposes increased tax allowances for working families and asks businesses and high-value future residents to make a greater tax contribution.

The definition of a financial services company will be widened, moving more companies into the 10 percent tax rate, raising an extra GBP3m (USD3.9m) per year.

A 20 percent income tax is proposed for retailers with profits exceeding GBP500,000 a year. The tax will start on profits of GBP500,000 with the full 20 percent rate payable on profits of GBP750,000 or more, the Government said. This is estimated to raise GBP5.7m a year from around 20 mainly foreign-owned businesses.

Fees on international service entities will rise and more companies will be required to pay them. These fees are paid by regulated financial services businesses and currently raise GBP9m per year.

The tax-free income allowance for working age people will rise by 2.5 percent, to GBP14,900, and the second earner's allowance will increase by GBP850 to GBP5,850, eliminating the disparity in allowances between married and cohabiting couples, where both partners are earning.

The minimum annual tax payable by new high-value residents will rise from GBP125,000 to GBP145,000, with the minimum tax contribution to be reviewed every five years from 2023. This measure applies from January 2018.