Jersey's 2012 Budget Approved

by Jason Gorringe, Tax-News.com, London

11 November 2011

Jersey's legislature, the States Assembly, has approved the 2012 Budget, which contains a number of measures to boost the island's economy as well as providing tax relief to lower-wage earners.

The Budget contains numerous tax measures, including:

• An increase in personal income tax exemption thresholds in line with inflation;
• An increase in the threshold for eligibility for first-time home-buyers' tax relief to GBP450,000 (USD717,000);
• The extension of tax allowances for those taxable under Jersey's '20 means 20' personal income tax regime (under which allowances are being phased out for high income individuals);
• An increase in tax relief for childcare costs for the under-3s, from GBP6,150 to GBP12,000 per year;
• An increase in ISE (International Services Entities) fees paid by banks to GBP30,000 to GBP50,000 per year - to match the GST increase and fulfil the commitment made in the 2011 Budget;
• An increase in tobacco duty by 10% (GBP0.35 on a packet of 20 cigarettes) and alcohol duty by 5% (GBP0.50 on a bottle of spirits, GBP0.06p on a bottle of wine and GBP0.01 per pint of beer or cider).
• Increases to Vehicle Emissions Duty rates by 5%; and
• The introduction of a cap of GBP50,000 on tax-free termination payments, reducing the tax-free amount of payments received on termination of employment, affecting primarily high earners.

Explaining the reasoning behind the 2011 budget proposals, the island's Treasury and Resources Minister, Phillip Ozouf stated:

“Now that we have taken the difficult decisions to tackle the impact of the global downturn, we can maintain our prudent approach to managing the island’s budget, while also delivering additional support to those who need it most.”

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