
Income
Tax (Amendment No. 46) (Jersey)
Law 2021
A LAW to amend the Income Tax
(Jersey) Law 1961 to remove the prior-year basis method of paying income tax.
Adopted
by the States 4th November 2020
Sanctioned
by Order of Her Majesty in Council 10th February 2021
Registered by the Royal Court 12th February 2021
Coming into force in accordance with Article 10
THE STATES, subject to the sanction of Her Most
Excellent Majesty in Council, have adopted the following Law –
1 Amendment of the Income Tax (Jersey) Law 1961
(1) This
Law amends the Income Tax (Jersey) Law 1961[1].
(2) In this Law, a reference to an Article is a
reference to that Article in the Income Tax (Jersey) Law 1961.
2 Article A39 (interpretation of Part 7)
substituted
For Article A39
there is substituted –
“A39 Interpretation of Part 7
(a) expressions defined in Article A15
(interpretation of Part 4) have the same meaning, unless the context requires otherwise;
and
(b) “tax” means income tax.”.
3 Article 41A (duty to pay instalment
in May (individuals and unincorporated bodies)) substituted
For Article 41A there is substituted –
“41A Duty to pay instalments (taxpayers
other than companies)
(1) A
person who is not a company must pay instalments of income tax for a year of
assessment beginning on or after 1st January 2021 if –
(a) 25% or less of the person’s
total income for the year before the year of assessment consists of earnings;
and
(b) the amount of the
instalment payable under paragraph (3) is £100 or more.
(2) A
person who is required to pay instalments of income tax for a year of
assessment must pay 2 instalments for the year, which are due and payable as
follows –
(a) the first instalment is
due and payable on 30th November in the year of assessment; and
(b) the second instalment is
due and payable on 31st May in the year following the year of assessment.
(3) The
amount of a person’s first instalment is calculated as follows –

Where –
A is the amount of the instalment;
B is 0.5 if the person’s income for the
year before the year of assessment did not include any earnings, and is 0.4 in
any other case;
C is the person’s liability to income tax
for the year before the year of assessment; and
D is the amount of income tax already paid
for the year of assessment (not including an amount deducted during the year
under Article 41B or 41E).
(4) If,
at the time the second instalment is payable, an income tax assessment has not
been made for a person for the year of assessment, the amount of the person’s second
instalment is calculated as follows –

Where –
A is the amount of the instalment;
B is 0.5 if the person’s income for the
year before the year of assessment did not include any earnings, and is 0.4 in
any other case;
C is the person’s liability to income tax
for the year before the year of assessment; and
D is the amount of income tax already paid for
the year of assessment (not including an amount deducted during the year under
Article 41B or 41E and the amount paid for the first instalment).
(5) If,
at the time the second instalment is payable, an income tax assessment has been
made for a person for the year of assessment, the amount of the person’s second
instalment is the lower of –
(a) the person’s remaining
income tax liability for the year of assessment; and
(b) the amount calculated using
the formula in paragraph (4).
(6) This
Article applies regardless of whether, at the time an instalment is due and
payable, an assessment has been made for the year of assessment or any prior
year.
(7) This
Article does not apply in respect of tax charged under Part 19 on a scheme
manager of an approved Jersey scheme, an approved drawdown contract or an
approved trust (as defined in Article 130).
41AA Applications to waive or
reduce amount of instalment
(1) A
person may apply to the Comptroller to waive or reduce the amount of an
instalment payable under Article 41A that is due one month or more after
the date the Comptroller receives the application if –
(a) the person’s income tax
liability for the year of assessment is likely to be substantially less than
the sum of the instalments payable for the year; or
(b) the person’s income for
the year of assessment from sources other than earnings is likely to be
substantially less than the person’s income for the previous year from those
sources.
(2) The
Comptroller may accept an application that is received less than a month before
the date the instalment is payable if the Comptroller is satisfied that the
applicant was not able to apply at an earlier time due to absence, sickness or
another reasonable cause.
(3) On
receipt of an application, –
(a) the Comptroller may waive
or reduce the amount of the instalment; and
(b) the Comptroller must
notify the applicant of the outcome of their application.
(4) If
the Comptroller refuses accept a late application or to waive or reduce the
amount of an instalment payable by a person, –
(a) the person may appeal the
refusal to the Commissioners by giving notice in writing to the Comptroller
within 40 days of the date on which the notice of refusal is issued; but
(b) the instalment remains
due and payable by the date specified in Article 41A(2).
(5) If
the Commissioners conclude that the instalment should be waived or reduced, the
Comptroller must repay any amount determined to have been overpaid.
(6) Part 6
applies, with the necessary modifications, to an appeal under this Article as
if it were an appeal against an assessment.”.
4 Article 41AA (duty to pay
instalment (companies)) renumbered
Article 41AA (duty to pay instalment (companies)) is renumbered
as Article 41AB.
5 Article 41C (calculation of rate)
substituted
For Article 41C there is substituted –
(1) The
rate applicable to an employee for a year is the lower of –
(a) the rate calculated using
the formula in paragraph (2), rounded up to the nearest whole number; and
(b) the maximum rate for the
employee in paragraph (3).
(2) The
formula to calculate an employee’s rate is –

Where –
A is the rate;
B is the employee’s estimated liability to
income tax for the year to which the rate applies;
C is the employee’s total arrears of income
tax (if any) for any earlier year of assessment (whether or
not judgment has been obtained in respect of the arrears) and any costs
recoverable in respect of those arrears;
D is the amount of income tax already paid
for the year to which the rate applies (not including any amount deducted during
the year under Article 41B or 41E); and
E is the estimated sum, for the year to
which the rate applies, of the amount of income for which the employee is
liable to be assessed and the amount of income from which the employee is
liable to allow the deduction of tax.
(3) The
maximum rate for an employee is –
(a) 20%, if the employee has
no arrears of income tax;
(b) 25%, if the employee has
arrears of income tax for one year of assessment;
(c) 30%, if the employee has
arrears of income tax for 2 years of assessment; and
(d) 35%, if the employee has
arrears of income tax for 3 or more years of assessment.
41CA Revised rates: initiated by
Comptroller
(1) If
one or more of the variables used to calculate an employee’s rate changes, the
Comptroller may determine a revised rate for the employee by applying Article 41C
using the new variables.
(2) If
the Comptroller considers that the revised rate determined under paragraph (1)
will not recover the employee’s income tax liability (including arrears for
previous years) by the end of the year to which the rate applies, the
Comptroller may determine a revised rate that is the lower of –
(a) the rate calculated using
the formula in paragraph (3), rounded up to the nearest whole number; and
(b) the maximum rate for the
employee in Article 41C(3).
(3) The
formula for calculating a revised rate in the circumstances described in
paragraph (2) is –

41CB Revised rates: initiated by
employee
(1) An
employee may request that the Comptroller determine a revised rate for the
employee that is higher than the rate determined under Article 41C or
41CA.
(2) The
Comptroller may approve or refuse a request.
41CC Notification of rate
(1) After
determining the rate applicable to an employee (including a revised rate), the
Comptroller may issue a notice in writing to the employee and the employee’s
employer that states the rate and the day from which it applies.
(2) A
notice issued by the Comptroller has effect until the earlier of –
(a) the day stated in the
notice;
(b) the day on which a rate
specified in a further notice applies; or
(c) the end of the year to
which the rate applies.
41CD Appeals against rates
decisions
(1) An
employee may appeal to the Commissioners against a rate determined to apply to
the employee by giving notice in writing to the Comptroller within 40 days
of the date on which the notice of the rate is issued to the employee.
(2) An
employee may appeal against a refusal by the Comptroller to determine a rate to
apply to the employee by giving notice in writing to the Comptroller within 40 days
of providing the Comptroller with sufficient
information to determine a rate.
(3) The
rate that applies to the employee before the employee gives notice of an appeal
(whether it is the rate determined by the Comptroller or the rate applicable under
Article 41B(2)(b)) continues to apply until the appeal is determined.
(4) Part 6
applies, with the necessary modifications, to an appeal under this Article as
if it were an appeal against an assessment.
41CE False and altered rate
notices
(1) A
person must not give another person –
(a) a document purporting to
be a notice issued by the Comptroller under Article 41CC, knowing it to be
false; or
(b) a notice issued by the
Comptroller under Article 41CC, knowing that the notice has been altered
by a person other than the Comptroller.
(2) A
person who breaches this Article commits an offence and is liable to a fine.
41CF Rates do not prevent
recovery of arrears
The
Comptroller may continue to pursue the recovery of arrears of income tax for an
earlier year of assessment and any costs recoverable in respect of those
arrears, regardless of whether those amounts are used in determining a rate to
apply to an employee.”.
6 Article 41G (treatment of amounts
received by Comptroller) substituted
For Article 41G there is substituted –
“41G Treatment of amounts received
by Comptroller
(1) The
Comptroller must apply an amount deducted and remitted under Article 41B
or 41E –
(a) as a payment of income tax
by the employee or sub-contractor from whom it was deducted; or
(b) if the employee or
sub-contractor from whom it was deducted is a spouse B to whom Article 121(1)
(general rule as to income tax on married persons) applies or a civil partner B
to whom Article 122B(1) (general rule as to income tax on civil partners)
applies, as a payment of income tax by the employee’s or sub-contractor’s
spouse A or civil partner A.
(2) The
Comptroller must apply the amount to the year of assessment in which it was
deducted (the “deduction year”) unless paragraph (3) or (4) applies.
(3) If
the amount was deducted from an employee whose effective rate accounts for the
recovery of arrears of income tax or costs recoverable with them, the
Comptroller must apportion the amount between the employee’s liability to income
tax for the deduction year and the employee’s liability to pay the arrears or
costs (the apportionment must reflect the proportion each liability makes up of
the total liability).
(4) If
the amount was deducted from a sub-contractor who has arrears of income tax
from a previous year of assessment or costs recoverable with those
arrears, –
(a) the Comptroller must apply
any amount received that exceeds the sub-contractor’s liability to income tax
in the deduction year as a payment of the arrears or costs; and
(b) if the arrears or costs
are from more than one previous year of assessment, the Comptroller must apply
the excess to the earliest year of assessment first.”.
7 Article 41H (arrangements for new
taxpayers and certain exempt persons) amended
For Article 41H there is substituted –
“41H Requirement to provide
information when entering or resuming employment or sub-contracting
(1) This
Article applies to a person who –
(a) begins employment in
Jersey for the first time or after being non-resident in Jersey for at least
one year of assessment; or
(b) enters
into a contract as a sub-contractor of a building contractor in Jersey
for the first time or after being non-resident in Jersey for at least one year
of assessment.
(2) The
person must, no later than one month after beginning or resuming the employment
or entering into or resuming the contract, notify the
Comptroller in writing of –
(a) the person’s full name
and place or places of residence;
(b) the reference number
assigned to the person for the purposes of the Social Security (Jersey) Law 1974[2];
(c) the person’s date of
birth;
(d) the number of children
dependent on the person;
(e) the date (if any) the
person arrived in Jersey;
(f) the name and address
of –
(i) if the person is an
employee, the person’s employer, or
(ii) if the person is a
sub-contractor of a building contractor, the building contractor;
(g) the date the employment
or building contract began;
(h) an estimate, for the year
in which the employment or contract began, of the person’s –
(i) earnings from the
employment or payments under the building contract, and
(ii) income from all other
sources.
(3) If
the person is married or in a civil partnership, the person must also notify
the Comptroller of –
(a) the date of the marriage
or formation of the civil partnership;
(b) which spouse or civil
partner is spouse A or civil partner A and which spouse or civil partner
is spouse B or civil partner B; and
(c) the information required
by paragraph (2) in respect of their spouse or civil partner.
(4) The
Comptroller may –
(a) require the information
to be provided in a form, and in a manner, approved by the Comptroller; and
(b) require the person
providing the information to sign a declaration that the information is true,
complete and correct to the best of the person’s knowledge.”.
8 Schedule 5 (savings, transitional
and similar provisions: general) amended
In Schedule 5, after paragraph 21 there is inserted –
“22 Interpretation of paragraphs 23 to 25
“2019 liability” means the amount of income tax assessed
(or to be assessed) for the year beginning 1st January 2019;
“new taxpayer” means a person –
(a) to whom Article 41H
(as in force before amended by Income Tax (Amendment No. 46) (Jersey) Law 2021[3]) applied for the year beginning 1st January 2019; or
(b) who chose to be treated
as if Article 41H applied to them for the year beginning 1st January 2019.
23 Income Tax (Amendment No. 46) (Jersey) Law
2021: deferral of 2019 liability
(1) The
2019 liability for a person who is not a new taxpayer –
(a) is not due and payable by
the dates set out in Articles 39, 41A and 41AA; but
(b) will become due and
payable as specified in Regulations made under this paragraph.
(2) Article 41I
does not apply in relation to the 2019 liability for a person who is not a new
taxpayer.
(3) The
States must, no later than 31st March 2021, make Regulations that –
(a) provide for the payment
of the 2019 liability;
(b) provide for any other
matter that the States consider necessary to provide for the payment of the
2019 liability.
(4) Regulations
made under this paragraph may –
(a) provide for recovery of
the 2019 liability –
(i) from a person who
becomes non-resident before their 2019 liability is paid in full, and
(ii) from the estate of a
person who dies before their 2019 liability is paid in full; and
(b) allow the Comptroller to
vary the payment dates that apply to a person on application from the person.
(5) Regulations
made under this paragraph must not waive, or reduce the amount of, a person’s
2019 liability.
24 Income Tax (Amendment No.
46) (Jersey) Law 2021: transfer of payments from 2019 to 2020
(1) This
paragraph applies to a payment if –
(a) the payment was made
before 1st January 2021;
(b) the payment was not
received as a payment by a new taxpayer; and
(c) the payment was applied
to the 2019 liability or to any penalties or surcharges in respect of the 2019
year of assessment.
(2) The
Comptroller must treat a payment to which this paragraph applies as a payment
of income tax for the 2020 year of assessment.
25 Income Tax (Amendment No.
46) (Jersey) Law 2021: payment of instalment for 2020
(1) A
person must pay an instalment of income tax for the 2020 year of assessment
(“2020”) if –
(a) the person is not a company;
(b) 25% or less of the person’s
total income for the 2019 year of assessment consists of earnings; and
(c) the amount of an
instalment payable under this paragraph is £100 or more.
(2) The
instalment of income tax for 2020 is due and payable on 31st May 2021.
(3) If,
at 31st May 2021, an income tax assessment has not been made for the person for
the 2020 year of assessment, the amount of the person’s instalment is
calculated as follows –

Where –
A is the amount of the instalment;
B is 0.5 if the person’s income for 2019
did not include any earnings, and is 0.4 in any other case;
C is the person’s 2019 liability; and
D is the amount of income tax already paid
for 2020 (not including an amount deducted during the year under Article 41B
or 41E).
(4) If,
at 31st May 2021, an income tax assessment has been made for a person for the
2020 year of assessment, the amount of the person’s instalment is the lower
of –
(a) the person’s remaining
income tax liability for the 2020 year of assessment; and
(b) the amount calculated using
the formula in sub-paragraph (3).
(5) This
paragraph does not apply in respect of tax charged under Part 19 on a
scheme manager of an approved Jersey scheme, an approved drawdown contract or
an approved trust (as defined in Article 130).
(6) In
this paragraph, “earnings” has the meaning given in Article A15.
(7) Article
41AA applies, with necessary modifications, to the waiver or reduction of
amount of an instalment payable under this paragraph.”.
9 Minor and consequential amendments
The Schedule contains
consequential amendments to give effect to the amendments made by this Law and
other minor amendments.
10 Citation and commencement
(1) This
Law may be cited as the Income Tax (Amendment No. 46) (Jersey) Law 2021.
(2) Article
8 comes into force on 16th November 2020.
(3) The
remainder of this Law comes into force on 1st January 2021.