Jersey States Employees Stung By Backdated Tax On Rent Subsidies

by Amanda Banks, Tax-News.com, London

10 January 2003

Many States of Jersey employees on J-category contracts were shocked to discover that rent subsidies received as part of their employment package have been deemed a taxable benefit, and are to be taxed retrospectively.

The Jersey Evening Post reported this week that more than 100 essential employees, including doctors, teachers, social workers and therapists are likely to face substantial backdated tax bills as the result of a recent decision on the part of Comptroller of Income Tax, Malcolm Campbell.

However, Mr Campbell has defended his actions, despite the fact that many of the affected employees were told by the Jersey tax authority on taking up their contracts that they did not need to declare the subsidies.

'I am only doing what my oath of office and what the Income Tax Law requires of me, and I must act without favour or partiality. Where there is fraud, wilful deceit or neglect I can go back as many years as I wish, but if there has been an innocent error I shall only go back five years. I have made it clear that if this causes some financial difficulty in terms of back tax I am perfectly happy to reach an arrangement to pay off the tax over a period.'

However, the limitation of the retrospective collection of the tax to five years is of little comfort to the States staff or their employers, who feel that since the error was not of their making, they should not be required to pay the back taxes.

Speaking to the JEP, Health President, Senator Stuart Syvret condemned the decision as 'preposterous', adding that:

'It is totally unacceptable and intellectually and morally dubious for this to be applied retrospectively. I have been told that advice was sought by some of the staff some time ago and they had actually been told they did not need to declare.'

Education President, Senator Mike Vibert echoed this sentiment, telling the newspaper that: 'My concern is that staff are being penalised for something which is not their fault. If there was an oversight, it was not their fault and it should not be applied retrospectively.'

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