Income tax in Jersey: a basic guide
What does taxable income include?
Taxable income includes:
- earnings from employment, including tips
- termination payments (first £50,000 paid tax free)
- casual earnings
- profit from self employment
- pension income
- interest on bank deposits and investments
- dividend income
- property income (from both letting a self contained unit and lodgers)
- some maintenance or alimony
- trust income
- invalid care allowance paid by Social Security
There are some sorts of income which you do not pay tax on. These include income support, incapacity benefit and maintenance paid under an agreement made on or after 1 January 1997.
Employment income
Income from property
Investment income
Information for the self-employed
Family day care providers
Exemption thresholds
There are tax exemption thresholds to prevent liability to tax for individuals or families on low incomes. There are also additional allowances and reliefs that increase the exemption thresholds. These include child allowance, child care tax relief and qualifying mortgage interest relief.
As well as exempting low income households, these exemption thresholds are also used to calculate the tax due if your income exceeds the exemption threshold. This is called marginal relief. It effectively means that instead of paying 20% tax on your total income a charge on your income in the range of 0% to 20% will apply.
If your income increases, marginal relief gradually tapers away until a charge of 20% on the total is applied, although employment expenses such as pension contributions and other deductions like child allowance, may also mitigate the tax charged if your income exceeds the levels at which marginal relief is preferential.
We always work out both methods and give you the most beneficial calculation.
Marginal calculation of tax
Exemption thresholds, allowances and reliefs for 2011
Exemption thresholds, allowances and reliefs for 2012
Maintenance relief
Apportionment of allowances and exemptions
If you are in Jersey on a seasonal basis, arrive or leave permanently in any calendar year your allowances and exemptions will be apportioned for the number of complete weeks you are resident. You will be taxed on all your income for this period, but we will not charge you tax on any non-Jersey income which you receive outside of these dates.
Apportionment of personal allowances
Benefits in kind (BIK)
If you are an employee or a director and you receive non-cash benefits you may have to pay tax on them. Examples of benefits that you might have to pay tax on include:
- company vehicles
- living accommodation
- share options
- payments made for individual health cover
- gift vouchers
Benefit in kind information for employees
Tax treatment of share options
How you pay tax in Jersey
Income tax is collected in different ways depending whether you are employed, self employed, retired or a combination of these. Income Tax is collected either by a deduction from your salary (Income Tax Instalment Scheme - ITIS) or payments made on account.
It is not unusual to have to pay both ITIS and make a payment on account if you have a variety of sources of income or a change in circumstances.
Paying income tax
Income Tax Instalment System (ITIS)
Registering for tax
If you have arrived in Jersey and not previously registered you should complete an Income Tax registration form. These can be obtained from the Taxes Office or the Social Security Department. If you have previously registered and are returning you should complete a returning to Jersey form.
Returning to Jersey
Checking the amount you pay
It is very important to check that you are paying the right amount of tax. You can do this by:
- checking your total taxable income against the allowances and reliefs you are entitled to
- looking at the assessment we send you to make sure you agree with the income, expenses and allowances you have been given
Understanding your tax assessment
Childcare tax relief
Residency for tax purposes
Employment expenses
Capital allowances explained
Non-residency for tax purposes