Planned Jersey Tax Measures Criticised

by Amanda Banks, Tax-News.com, London

26 September 2002

Tax proposals currently being examined by the Finance and Economics Committee have come under fire from Jersey's agricultural and tourism sectors, which have argued that they will be forced to shoulder a disproportionate amount of the Island's tax burden if the planned measures are adopted.

Reporting on an Economic Forum meeting held earlier this week, the Jersey Evening Post revealed that representatives from the two sectors objected especially to a planned tax on benefits in kind, and to a new vehicle registration tax.

Speaking on behalf of the Jersey Farmers Union, President Roger Thomas argued that as accommodation - which would be deemed a 'benefit in kind' under the new rules - makes up at least part of the wage of some 90% of the Island's farm workers: 'This tax will have a big effect; employers will have to make up the amount.'

This concern was echoed by local hotelier, David Seymour, who according to the JEP, argued that as the majority of hospitality industry employees are invited to work in Jersey on a temporary basis: 'Part of that invitation is to pay them a decent wage and provide accommodation, otherwise we won't get any staff. Because they are not from the Island they can't rent or buy, except in the lodgings sector.'

He added that the proposed tax measures would put the Channel Island jurisdiction at a competitive disadvantage compared with English resorts, explaining that: 'In the UK there are exemptions for what is considered necessary for the performance of an employee's duties. On top of that, we in Jersey are also looking at a minimum wage.'

The JEP also reported that grave concerns with regard to the likely effect of a vehicle registration tax on the car hire industry were expressed at the meeting, but that Senator Walker dismissed suggestions that the vehicle tax should be postponed or modified, arguing that if hire cars were exempted, there would be a 'public outcry'.

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