If you're employed
In Jersey, employer's don't receive a tax coding to calculate the tax their employers should be paying, unlike countries with systems such as pay as you earn (PAYE).
Instead, through the Income Tax Instalment System, employers follow instructions issued by Revenue Jersey in the form of an ITIS effective rate and deduct a percentage of tax from the salaries they pay their employees.
How it works
- You register for tax and tell us what you income will be.
- Revenue Jersey work out your tax percentage which we send to you to hand to your employer, this is called your effective rate.
- The following year you fill out a tax return declaring all your income for the previous year
- Revenue Jersey work out your tax and re-calculate the effective rate.
- If you've overpaid you may be due a repayment or a reduction in your tax rate.
- If you've underpaid you'll need to pay the balance or we'll increase your effective rate to cover the outstanding tax
If you don't have an effective rate to give to your employer they are legally required to deduct 21%.
The deductions pay instalments towards your tax bill each month and are only as accurate in covering the tax bill as the previous information we have on our records, or the information your tell us.
For example, when you first register if you only declare your salary for core hours, but actually earn an extra £200 per month in overtime, you'll have to pay an extra amount to cover the extra tax.
If your circumstances change during the year it's important that you tell us straight away.
Calculating and updating your ITIS rate
If you work for yourself (self-employed) or you've retired
If all you income is from non-salary sources, (for example self-employment income, pension income or property income) you'll be sent a payment on account request.
How it works
- In February, we send you a Payment on Account request. (It's an estimated payment amount toward your coming tax bill for the year based on 50% of the total tax bill for the year based on 50% of the total tax bill you paid last year.)
- You must pay the 'Payment on Account' amount by April.
- You submit your tax return by the May deadline.
- Your tax return is used to calculate your actual tax assessment for the year.
- We send you this tax assessment once it's calculated, along with a request for the balancing payment. (Your tax for the year less your payment on account.)
- The balance is due before the late payment surcharge deadline in December. This date is included on your tax assessment.
If you have a small salary you'll still have ITIS payments deducted but this will only account for a small part of your total tax payments. Your payment on account amount issued in February will be adjusted to 40% of last year's tax.
If you pay on account you can spread your payments over 12 months with a direct debit.
We will set up your payments based on the previous year's tax bill and then review the instalments after we receive your tax return.
If you want to set up a direct debit contact us to request a direct debit form.
Appealing against your payment on account notice
When we send you a payment on account notice, it is based on your tax bill from the previous year. If your taxable income has reduced to the extent that the payment on account request is an unreasonable demand based on what your final tax bill will be, you may appeal.
In order to support your appeal we will need a letter recommending the amount you think your payment should be and either:
- your completed tax return for the year in question
- a schedule of your income for the relevant year (your tax return will still need to be submitted in due course)
Late payment penalties
How to make payments to the taxes office