J-Cat Tax Row Continues In Jersey

by Amanda Banks, Tax-News.com, London

04 March 2003

Following a suggestion put forward last month that J-category employees who found themselves unexpectedly facing a five-year back tax bill on rent subsidies should be forced to contribute 50% of the liability, Jersey Deputy, Phil Rondel has gone a step further, according to a report from the Jersey Evening Post.

It had been agreed in January that the employers of the affected employees, who included doctors, nurses, teachers, and social workers, should foot the tax bill, as many of the J-category workers had not been informed that the subsidies should be declared as a taxable benefit. However, given that the employers in this case are the States authorities, this would mean that the liability would be paid out of the public purse, a possibility which caused outrage amongst the Island's taxpayers.

Speaking last month, St Brelade Deputy, Peter Troy announced that: 'Senator Walker implied that there were errors on the part of the employers and errors on the part of the employees so I think each paying 50% is fair. My proposition has the chance of saving the taxpayer perhaps hundreds of thousands of pounds.'

However, according to the JEP, Deputy Rondel has urged that the liability should be met by the workers themselves:

'It is a tax liability we are talking about here. I cannot see why the States should be volunteering to pay the tax of employees,' he observed, continuing:

'Although I have sympathy that these people...have to meet a five-year burden, it is surely between them and the Comptroller to determine how that back tax liability is met.'

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