Non-payment of ITIS and Social Security contributions (FOI)

Request

A

If an employer does not pay an employees’ ITIS or Social Security Contributions after deducting it from their wages, who is responsible for paying for the missing contributions?

B

If it is the employer, how is this money reclaimed? 

C

If the employer is taken to Petty Debts Court or Royal Court, depending on the amount, what steps are taken to recover the payments? 

D

Is the employer prosecuted for non-payment? 

E

How many employers have been prosecuted in the last five years for non-payment?

F

If money is not successfully reclaimed from the employer,  does the Government of Jersey credit the employees records or does the employee have to pay again?

G

If an employer does not take contributions out of an employees’ wages nor pay their ITIS, is it then down to the employee to make up the payments?

Response 

A

It is the legal responsibility of the employer to pay to the Comptroller the amount of income tax and social security contributions deducted from an employee’s wages.

These legal obligations are set out in Article 41B (5) of the Income Tax (Jersey) Law, 1961 and Article 5 of the Social Security (Collection of Class 1 and Class 2 Contributions) (Jersey) Order 2013. Please see the following link: 

Income Tax (Jersey) Law 1961 (jerseylaw.je)

B

If the employer does not comply with their legal obligations, the debt management team will pursue the outstanding income tax and contributions from the employer.

C

The debt enforcement team will use a range of recovery options to collect payment in proportion to the size of the debt which may include referral to the Viscount’s Department.

D

The employer can be prosecuted where necessary.  However, civil proceedings are a more cost effective and timely way to collect debt.

E

No employers have been prosecuted in the last five years for non-payment.

F

Where the money is not successfully claimed from the employer, or more commonly the employer has gone onto some form of administration and there are insufficient funds to meet the full liabilities, then the employee will receive credits based on the combined employer returns received. If the combined employer return itself has not been submitted, then the employee can provide the Comptroller with evidence, such as payslips, to demonstrate that wages have been paid and the deductions have been made, and an amount equivalent to the income tax and social security contributions deducted can be credited to the employee’s records. 

G

If an employer does not take contributions and income tax out of an employee’s wages, this does not alter the legal obligation of the employer to pay social security contributions and income tax.  

Where an employee has been paid gross, the employer must still declare the wage for income tax purposes. As the employee will have no credits for ITIS deductions, they will pay the full outstanding tax.