19/10/22

JERSEY: Chief Minister defends Island after Sunday Times article.

As published on jerseyeveningpost.com, Tuesday 18 October, 2022.

The Chief Minister has defended the Island following a national newspaper article which painted Jersey as a tax haven playground for multimillionaires while others were struggling to afford enough food – but has pledged to be more ‘discerning’ when dealing with future high-value residency applications.

Deputy Kristina Moore (left) said that her government was ‘actively seeking to improve Islanders’ quality of life’ and that the proposed Common Strategic Policy aimed to raise living standards.

An article in The Sunday Times highlighted the Island’s reputation as a haven for the super-wealthy while pointing out that the number of Islanders struggling to make ends meet and having to turn to food banks was increasing.

Deputy Moore said: ‘This weekend, I helped Grace Trust serve their Saturday lunch at St Paul’s Church to more than 50 people who needed the charity’s support, and it was a chance for me to learn more about what government can do to support Islanders with the challenges our community is facing. I know that people in Jersey care particularly about having access to sufficient affordable homes for themselves and their families, and are worried by the rising cost of living. Dealing with these key issues is at the core of our ambitions for this government.

‘People want to move to Jersey because we have a fantastic social and natural environment, a wonderful safe community, and because of our location close to the UK and Europe. This will not change, and Jersey will remain an attractive jurisdiction. We will continue to value our high-value residents and we want them to contribute appropriately to the Island.

‘We are not going to change the regime for anyone who arrived before 2018, but we have committed to updating the 2(1)e policy so that it can further enhance the economic and social benefits to the Island from a fewer number of applicants in future.

‘Our approach is to be more discerning. We expect to raise greater revenue from a smaller number of high-value residents, and in fact we have recently turned a number of applicants down.’

As one of her first acts as Chief Minister, Deputy Moore pledged to deliver an emergency mini-budget designed to help Islanders tackle the cost-of-living crisis. The £56.5m package of measures was agreed by the States Assembly last month.

The article in The Sunday Times also questioned Jersey’s tax structures, stating: ‘The Island’s low tax rates and finance industry may be legal and compliant, but the Island is still enabling individuals and businesses to avoid contributing billions to HM Treasury and the public finances of other nations. Just because doing so is “all within the rules” doesn’t mean Jersey’s reputation remains untarnished.’

Currently, those offered 2(1)e status pay 20% tax on their first £725,000 of income – totalling £145,000 – and 1% on all income above that amount.

Deputy Moore added: ‘We are reviewing the 2(1)e regime. Our Government Plan increases the personal income tax charge to the maximum possible of £170,000 to reflect inflation, with all income exceeding £850,000 taxed at 1%. We are reviewing the scheme to change criteria for new applicants. We recognise that there are 88 Jersey residents who are not part of the high-value residency scheme, who each paid just over £220,000 in tax in 2020 – in other words, they pay the full Jersey tax rate of 20% of their income.’

As of last December, there were 184 people living in Jersey who had arrived under the scheme since 2005. From 2018 to 2020, an average of 19 applications were approved each year, while 23 applications were approved during 2021.