Jersey Announces Phased Approach To GST Registration

by Jason Gorringe, Tax-News.com, London

10 January 2008

In preparation for the introduction of Jersey’s Goods and Services Tax (GST) on 1 May 2008, the jurisdiction's Income Tax Office has announced that it is introducing a phased GST registration programme for businesses.

Under the programme, all businesses with a turnover of taxable goods and services (i.e. goods and services that are subject to GST at the standard, or zero, rate of tax) of more than GBP300,000, in any period of 12 months, must register before 1st May 2008 .

Businesses that have a turnover of less than GBP300,000 are not obliged by law to register, but may apply to register voluntarily. Non-registered businesses will not be allowed to charge GST.

The registration of businesses will be in three phases: phase one will start on Monday 14th January, for businesses with a 12-month taxable turnover of more than GBP10 million; phase two will begin on Monday 18th February, for businesses with a 12-month taxable turnover of between GBP1 million and GBP10 million; and phase three will commence on Tuesday 18th March, for businesses with a 12-month taxable turnover of between GBP300,000 and GBP1 million, and for those requesting voluntary registration.

The Income Tax Office wants all applications to be accompanied, where possible, by an estimate of the most recent annual taxable turnover and a preferred choice of dates for submitting the quarterly tax returns.

The Income Tax Office is using a phased approach to GST registration to ensure minimal delays in the processing of applications. However, businesses may register early under if they have sufficient reason so to do.

“GST is a tax on consumption, not a tax on businesses and we are trying hard to ensure that GST will not interfere unnecessarily with business activities," commented Comptroller of Income Tax, Malcolm Campbell on Tuesday.

“Income Tax Officers have already undertaken a large number of visits to business premises to help members of the business community to be ready to meet their legal obligations and we will continue with this programme," he added.

Because of the high GBP300,000 registration threshold, it is estimated that many smaller businesses, (about 70%-80% of all Jersey businesses) will not be forced to register and will therefore not be required to add the tax to their sales.

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