CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Jersey 2013 Budget Endorsed

Jersey 2013 Budget Endorsed

by Jason Gorringe,, London

07 December 2012

Jersey's legislative assembly, the States, has approved the island's 2013 Budget, presented by Treasury Minister, Phillip Ozouf on October 17, 2012, albeit with two amendments.

The only substantial revenue-raising measure in the proposed Budget involved substantial hikes to impots duties (customs duties). The States voted to abandon the duty hike on fuel and instead further raise taxes on tobacco products.

The other amendment involves an adjustment to the incoming "distribution rules," which will take effect from January 1, to make tax administration simpler for businesses. The anti-avoidance distribution rules seek to ensure that when taxpayers extract profits from a company, by whatever means, that income will be subject to income tax. However, if a company reinvests its profits to grow its business, neither the company nor the shareholders will be taxed. The introduction of the rules comes as a result of the government's plans to revoke the island's deemed distribution arrangements at the end of the year following a decision by the European Union's Code of Conduct Group on Business Taxation that the provisions are "harmful."

Other key budgetary measures that were approved without alteration include:

  • Increases to income tax exemption thresholds in line with inflation. At 3%, this is higher than the average increase in earnings, and is anticipated to save taxpayers more than GBP5m (USD8m).
  • Income tax relief on life insurance premiums for higher earners will be withdrawn, raising GBP500,000 annually, consistent with the ethos of the '20-means-20' income tax regime.
    An increased tax relief for first-time homebuyers through the extension of the stamp duty limit to GBP450,000.

Minor administrative changes, to close loopholes and ensure that revenues are paid when they are due, were also passed in respect of: exemptions for non-residents; benefits-in-kind for directors; the penalty regime for non-resident landlords; the additional persons allowance; the Income Tax Installment System regime; and private medical insurance paid by employers.

Welcoming the adoption of the budget, Ozouf stated: "This Budget maintains existing tax levels and provides extra support to islanders through increased personal exemptions. Now that the States have approved the Medium Term Financial Plan and the Budget, the hard work begins on implementing the policies and allocations set by members. This is a Budget that supports the long-term aims outlined in the Medium Term Financial Plan, in line with the recommendations of the Fiscal Policy Panel. We are in an almost unique position to be able to achieve this level of economic stimulus without incurring debt and while maintaining our key reserves."

Ozouf concluded that: “This Budget provides a vital next step towards Jersey’s future economic prosperity, by providing stability, certainty and growth.”

TAGS: tax | business | fiscal policy | international financial centres (IFC) | budget | Jersey | excise duty | offshore | stamp duty | inflation

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »