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Prior Year Basis (PYB) Tax Reform

Tax Reform proposition approved 

On 4 November the States Assembly agreed to move all prior year taxpayers onto a current year. 

The means that if you are a prior year taxpayer the payments you have made in 2020, for your 2019 tax bill, will now be used to pay your 2020 tax liability.  From 2021 you will become a current year taxpayer and your 2019 tax bill will be frozen, though you will have to pay it in future. Payment options to pay your 2019 tax liability are being developed (see payment options below) and will be debated by the States Assembly in early 2021.  

Importantly, this also means that all taxpayers who pay their tax by 'payment on account' through the year (rather than by ITIS) do not need to pay the balance of their 2019 bill in November 2020, but they can if they wish to do so. The next 'payment on account' will be due by 31 May 2021.

All prior year taxpayers received a letter from the Comptroller explaining what to expect.

Copy of tax reform letter

Tax reform and 4 steps to change

We have 4 steps to complete before we can give you certainty on whether you have a credit or balance to pay when you become a current year taxpayer.

Step 1

Revenue Jersey will complete all 2019 return assessments, which will confirm the amount of tax that will be frozen.

Step 2

Revenue Jersey make the 'switch over' early in 2021, and you'll become a current year taxpayer. Changes will be made to our records to move all the payments you have made to cover your 2019 liability, towards your 2020 tax bill.

Step 3

You file your tax return. In it is all the information we need on your income and any allowances you may be eligible for, which we need to know so we can assess the tax due on your 2020 income.

Step 4

In February 2021 we'll start assessing returns for prior year taxpayers, in date received order, checking the tax you paid in 2020 against the tax owed for 2020. We'll send you your assessment and if you pay by ITIS a revised current year rate will also be included.

Confirming your balance

We can't complete Step 4 until we have your return, so if you're keen to get certainty on whether you have a balance to pay or a credit due for 2020, complete your 2020 tax return as early as possible, and if you can, do it online as this helps to speed up the assessment process.

Complete your tax return online

If you didn't file online last year you'll still receive a paper return, but you'll have the option to switch to online filing.


If you are in credit on your account

We won't know if you have a credit on your 2020 tax until we have assessed your 2020 tax return. If your transferred payments have overpaid your 2020 tax, you will receive a nil balance to pay on your 2020 tax bill. If you pay by ITIS you will automatically get a reduced ITIS rate and you don't need to take any further action.

If you don't want a reduced rate or if you pay on account you can request:

  • a refund of the credit
  • any credit goes towards your frozen 2019 tax liability

Checking your 2019 tax liability

Your 2019 tax liability is stated on your 2019 notice of tax assessment. If you've not received it yet,  you should get it through the post  by the end of the year. We will only be able to tell you your 2019 liability once your assessment is complete and we post these to you as soon as they are done. We are working to get all assessments completed as quickly as possible.

General Partnerships

The proposal to move all personal taxpayers from a prior-year payment basis to a current year payment basis will apply equally to General Partnerships.

The 2019 liabilities of general partnerships will be frozen and all 2019 year of assessment payments made will be transferred and set off the 2020 year of assessment liability.

These partnerships are not therefore required to pay the balance of the year of assessment 2019 tax liability which is due 30 November 2020 but they can if they wish to do so.

Two phases of reform

In July 2020 the Minister for Treasury and Resources wrote to all personal taxpayers to outline her plans to move all Prior Year Basis (PYB) taxpayers onto Current Year Basis (CYB).  

Around two-thirds of taxpayers currently pay their tax for the previous year in the current year. For example, in 2020, these taxpayers are currently paying for their 2019 tax liability through their 2020 earnings. For tax purposes, this is known as Prior Year Basis.  

The proposals were to be delivered in 2 phases:  

Phase 1 

An Amendment to allow Revenue Jersey to freeze the 2019 tax liability and use 2019 tax payments to pay the 2020 tax liability.  

Phase 2 

Regulations, that would govern how the frozen 2019 tax liability would need to be paid. 

In August 2020 we ran a survey for Islanders to submit their views on the PYB Tax Reform Proposal. You can read the full report on the survey findings here. We also ran focus groups during October 2020 and emerging findings helped shape Phase 2 of the Proposals, the Regulations.

PYB Tax Reform proposal survey and findings

Developing the payment options (Phase 2)

The draft payment Regulations and supporting report were lodged with the States Assembly on 10 February 2021 and are due to be debated in late March 2021.

The Regulations and report set out the proposed options for paying the frozen 2019 PYB tax bill and have been developed in response to the results of the PYB survey, the findings of the  focus groups, which were run last October, as well as feedback from the Corporate Services Scrutiny Panel and States Members.

Focus group report

Paying your 2019 tax liability 


The Regulations outline the following two payment options for individual taxpayers.

​Option A - Payment plan (available to all former PYB taxpayers)
​You can elect to make regular payments (monthly, quarterly or annually) to clear their 2019 tax bill over a period of up to 20 years.
​You can start paying from 2022, but don't have to start making payments until 2025.
​You can also pay over a shorter period if you wish, but the liability must be paid by 2042 at the latest.
​You would need to make a payment of 1/17th of the 2019 income tax liability for each year, but this is cumulative, so you can 'front load' your payments and so pay less in later years.
​You would be able to pay off your 2019 liability at any point during the payment plan term.
​You will need to register for a Payment Plan by 30 September 2024.

​Option B – Commit to pay on retirement (available to former PYB taxpayers who have not yet reached States Pension Age)
​You can opt to use a wide variety of financial arrangements and assets to pay your 2019 tax liability. For example, a pension scheme that includes a lump sum payment on retirement, property investments, etc.
The full amount would need to be paid within 12 months of reaching States Pension Age.
Revenue Jersey may ask you to provide proof that your arrangement is in place from time-to-time.
The deadline for registering for this option is 30 September 2024.

Paying the 2019 tax bill in full

You may prefer to pay your 2019 tax bill in full and you can do so from now until 30 September 2024. If you have not paid in full by this date, you will have to register for Option A or B. Even once you have selected an option, you can still pay the remaining amount in full at any time.

2019 tax repayment calculator

Default Position 

If you don't register for one of the options, or pay the 2019 tax bill in full by 30 September 2024, you will be put onto the payment plan option A.

Switching between options 

The proposed Regulations permit you to apply to switch options once. If you are switching from Option B to Option A, additional payments might be necessary, depending on when the request is made.

Payment from a taxpayer's estate

There may be some circumstances where a retired taxpayer believes that they cannot afford to enter into a Payment Plan. They can apply to Revenue Jersey to allow, on their death, for their executors to pay the 2019 tax liability from their estate.

Only taxpayers who reached States Pension Age on 31 December 2020 are eligible to apply for this.   

Supporting those in financial difficulty

The choices former PYB taxpayers make will have implications far into the future and their circumstances may change over such a long period of time. 

As always, Revenue Jersey will maintain the long-standing practice of supporting taxpayers in financial difficulty and taking a sympathetic approach. Taxpayers are always encouraged to contact Revenue Jersey at an early stage, if they have financial problems. Revenue Jersey officers can then discuss the taxpayer's situation, the options available and, where appropriate, agree tailored 'time to pay' arrangements that are manageable, supportive and fair.

Only in cases where there is a continued failure to engage with Revenue Jersey to discuss, make or revise payment plans, will powers be exercised to recover the tax owed.

Find out more about Revenue Jersey's approach to supporting taxpayers through times of financial difficulty.

Payment holidays

As personal circumstances can change, if you're on a payment plan and judge that you are unable to make your payments, they you can choose to take a payment holiday for up to 12 months. 

To do this, you would need to contact Revenue Jersey and provide a brief explanation of your circumstances and select how many months you want the holiday for. Your payments will be then be paused for the agreed period.

For most people, a 12-month payment break will be enough, although it will be possible to apply to Revenue Jersey for a second or further payment holiday.

Those needing a payment holiday should be aware that they do not reduce the amount of the 2019 tax liability, which must be paid by 2042 at the latest. 

When the 2019 tax bill must be paid in full

The 2019 tax liability would have to be paid in full in the following circumstances.

Leaving the Island

If a taxpayer permanently leaves Jersey before their 2019 tax bill is fully paid, the      outstanding tax will become due and payable when they leave the Island. As is currently the case, the taxpayer and the Treasury would be able to come to a 'time-to-pay' arrangement, and no enforcement action would be taken as long as the payment agreement was kept.


The 2019 tax bill would also become due and payable six months following an individual's death. Time to pay arrangements can be put in place if needed by the executors. 

General partnerships

Special provisions apply to general Partnerships and these are outlined in the Regulations.

When a 2020 bill is significantly higher than the 2019 bill 

We accelerated work to bring in this change, because we are aware many islanders have suffered much reduced income in 2020 and face a 2019 bill they cannot pay from their smaller income.

However, we recognise for some the situation may be reversed. If may find yourself with a significantly higher 2020 tax bill than your 2019 one, for example, through returning to work after maternity leave. Revenue Jersey will ensure such situations are dealt with sympathetically and fairly and will minimise the impact for you.

Prior Year Basis taxation explained

Before we introduced the Income Tax Instalment System (ITIS), islanders usually paid their whole tax bill in one payment each year. There was no option to pay instalments from your salary. 

The Taxes Office would not know what taxpayers owed in tax until they submitted their tax return in the following year.

A new taxpayer would have a tax liability in their first year but would pay no tax until the year after.

For example:

  • a new taxpayer started work in January 2001, earning £20,000 that year
  • the tax would be in the region of £2,300 on their 2001 income, but would not have a bill to pay until 2002
  • tax returns for 2001 were sent out at the start of the following year (2002) 
  • the completed 2001 tax return would be received during 2002
  • it would be assessed, but the bill would not go out until September 2002, when all tax assessments went out the same time in a general issue
  • they would have until December 2002 to pay their 2001 tax

In this way, before ITIS was introduced, all islanders paid their tax on a Prior Year Basis (PYB). 

Income Tax Instalment System (ITIS) introduced

In 2006, the way islanders paid their tax changed when we introduced the income tax instalment system. This collected monthly instalments from your salary if you were employed or if you didn't have employment income, you paid an instalment yourself early in the year and a balancing payment at the end of the year.

For most taxpayers this changed the way tax was paid but it didn't change the year they were paying. Payments still went to the previous year's bill. So in 2006 the instalments went towards the 2005 tax (prior year basis).

The tax from the previous year is always payable, but due in the following year. This can cause payment issues for anyone whose income drops in the following year, for example through retiring or redundancy.

New taxpayers from 2006

There is a group of taxpayers where payments don't just go to the previous year's unpaid tax.

Instalments from employed taxpayers who registered for tax from 2006 go towards the same year's tax (current year basis). So in 2006 any instalments went towards the estimated 2006 tax and then continued on this basis.

The Income Tax Instalment System (ITIS) rate is calculated from the registration information the taxpayer provides and then estimated each year after that based on the previous year's tax assessment. The rate can be updated by the taxpayer if their income changes to make sure they don't underpay.

This tax is then finalised the following year when the return is submitted and any unpaid balance would need to be paid or a repayment would be due if the tax was overpaid.

This left people who newly registered for tax from 2006 or returned to Jersey after an absence to pay on a current year basis. Anyone who was an existing taxpayer before 2006 continued to pay on a previous year unless they opted to pay in advance and move to a current year.

This has been the status quo until this tax reform.

How the Income Tax Instalment System (ITIS) works

How the Income Tax Instalment System (ITIS) rate is calculated

Understanding your assessment


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