Two new goods and services tax (GST) accounting schemes, designed to help small business in Jersey, will come into force on February 1, 2010, the Island's government has announced.
The Annual Accounting Scheme will ease GST accounting requirements for smaller businesses. Those accepted will submit one GST return for each calendar year (instead of four), and make two payments of GST to the Treasury (instead of four).
It is estimated that up to 700 businesses with a taxable turnover of up to GBP500,000 could benefit from the scheme and they are urged to submit their application as soon as possible. The businesses will be asked to make an interim payment by July 31 each year, based on half the GST due from them the previous year, with the balance of tax due for payment required by the following January 31, with the Annual GST Return. The first Annual GST Returns will be for 2010.
The second scheme, Cash Accounting, will allow businesses to account for GST on sales when they are paid. It is open to businesses with a taxable turnover of GBP1m, and is particularly beneficial to businesses supplying services to the public, or where the average debtor period is greater than 70 days.
Those accepted on to the scheme will submit GST returns normally, but account for GST on the basis of payments received and made instead of invoices issued and received. It is not suitable for retail businesses, which already account for GST on sales when payment is received.
The Comptroller of Income Tax, Malcolm Campbell commented: "Our aim is to simplify GST procedures whenever possible, and I am confident that these measures will greatly assist small businesses. I urge all those who qualify to apply as soon as possible."
President of the Jersey Chamber of Commerce, Ray Shead, also welcomed the initiative. He said: "The GST team are a great example of delivering reductions in red tape and therefore cost for small local businesses."
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