Tax reform proposition approved
The States Assembly agreed the first law changes on 15 September and the first group of islanders will move to Independent Taxation from 1 January 2022.
When you move to Independent Taxation, you will be responsible for filing your own return and receiving and paying your own bill throughout your life, whether you are single, co-habiting in a civil partnership or married.
Public briefing event
Join our tax experts and ask questions about how Independent Taxation will affect you, at one of our public briefing events at the following venues:
|St Helier Town Hall||Wednesday 6 October||12pm to 2pm|
|St John Parish Hall||Thursday 7 October||2pm to 4pm|
|St Brelade Parish Hall||Monday 11 October ||2pm to 4pm|
|St Clement Parish Hall||Thursday 14 October||10am to 12pm|
|St Helier Town Hall||Thursday 14 October||6pm to 8pm|
|Online webinar||Tuesday 9 November||7pm to 8pm|
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Use our tax calculator to find out how tax allowances work and to get an Independent Taxation illustration.
The benefits of Independent Taxation
The move to Independent Taxation means that tax law will reflect the equality and fairness we expect from our relationships, families and community.
It will mean both partners in a marriage or civil partnership will be treated the same way.
Under the proposals, it's expected that by 2025, all islanders will be taxed independently.
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3 steps to change
Step 1: Single people
- In 2022, all single people and all new arrivals to the Island will be independently taxed. If you marry or become a civil partner after 31 December 2021, you'll stay independently taxed.
671 couples who were separately assessed for the 2020 year of assessment, are being invited to take part in a pilot study and move to Independent Taxation for the 2022 year of assessment. This pilot will gather feedback on processes and customer support so that improvements can be made ahead of step 2.
Step 2: Optional change
In 2022, married couples and civil partners will be offered the option to move to move to Independent Taxation for 2023.
Legislation for step 3 will be debated by the States Assembly in late 2022.
Step 3: Compulsory change
- By 2025, if the legislation is passed in 2022, remaining couples will move, and if your tax bill would be higher under Independent Taxation, you can claim a compensatory allowance. This would mean you're not worse off than you would be if you remained in married or civil partnership taxation, for at least the next 10 years.
If you're single
You'll continue to be taxed as you are now. Nothing will change for you because Independent Taxation is mostly based on current tax for single people.
If you get married or enter a civil partnership in the future, you'll continue to be taxed independently.
If you co-habit
You'll continue to be taxed as two single people if you live with your partner but are not married or in a civil partnership. Nothing will change for you because Independent Taxation is mostly based on current tax for single people.
If you get married or enter a civil partnership in the future, you'll stay independently taxed.
If you're married or in a civil partnership
Around 9 out of 10 taxpayers receive allowances when their tax is calculated, which reduces the tax they pay. Independent Taxation changes the allowances that people who are married or in civil partnerships receive.
You can choose to move to Independent Taxation from 2023 or wait and be moved automatically when it's compulsory, which is currently proposed to happen by 2025.
One of the factors driving your decision to move to Independent Taxation before it's compulsory, will be how much tax you will pay.
You may pay the same, or less tax when you are independently taxed, or you may pay more in 2023 or in any year until the compensatory allowance is available.
Once you elect to be independently taxed, you can't revert back to the current tax system, so it's important you understand how tax works and how the allowances will change.
You should explore how your tax may be affected before you decide. The information about changes to tax allowances and our tax calculator can help with this.
How current married and civil partner allowances will change
Married couples or civil partners are allowed £25,700 of income before paying tax. If both partners work, they receive an additional second earner's allowance of up to £6,300. This means the couple can have income up to £32,000 before they pay any tax.
Independent Taxation allowances
Each spouse or partner will be allowed £16,000 of income before paying tax. That adds up to the same £32,000 they are allowed under the current rules.
|Tax allowance||£25,700||Your tax allowance||£16,000|
|Second earners allowance||£6,300||Spouse or partner's tax allowance||£16,000|
You will claim expenses that you pay personally, like work expenses or contributions into a pension scheme on your own individual tax return.
Any mortgage interest relief claim should be made by the person who pays the mortgage.
Any child care tax relief claim should be made by the person who pays for the child care.
If you share payment of these costs, you should record on your own tax return, only the portion of the costs that you pay.
Any available child allowance will be shared between you equally unless you tell us otherwise. You may request to share this allowance in a different, more tax efficient way, for example if you have income less than the basic tax allowance and your spouse or partner earns more.
In normal circumstances if you're married or in a civil partnership you are not able to claim additional allowance for children. However, if you support your children and spouse or civil partner who is incapacitated for the whole year due to illness you can claim the allowance.
If your income is under £16,000
If you're married or in a civil partnership where one of you has income less than £16,000 per year and the other partner's income is more, your two Independent Tax bills added together, may be more than you pay with the current allowances.
The Treasury Minister is proposing a new allowance to make sure you and your partner aren't worse off by the change. The new allowance would become available when Independent Taxation is planned to become compulsory, by 2025.
For the next 10 years, you would pay no more tax on your income than if you'd remained in married couples or civil partnership taxation.
Before the end of the 10 years, the allowance will be reviewed.
It's proposed that you will be able to claim the allowance if your tax is more under independent taxation than it was under married or civil partnership tax rules. This will likely happen where one spouse or partner has income below the basic tax allowance.
If this happens the compensatory allowance will reduce the tax to the amount being paid using the married or civil partnership tax allowance.
Paying your own tax
Income Tax Instalment Scheme (ITIS)
You will receive your own ITIS rate if you are employed. It will be calculated based on, and pay towards, your individual tax bill.
Direct debits are normally reviewed annually according to changes in your tax bill.
If you have a direct debit that covers all your joint tax or your part of the tax, you may want to review the amount and how it is set up when you are independently taxed.
You may need to set up a new direct debit on your own account to pay your own tax.
Direct debit information
When you pay with a card online or send a payment using online banking, make sure you quote your own individual tax identification number (TIN).
Pay your personal or company tax
Paying off old tax
Paying the tax on income in any year before you move to Independent Taxation, will always remain the responsibility of the primary taxpayer in the marriage or civil partnership. This stays the case even after you move to Independent Taxation.
Most couples decide together how they pay any arrears, in the same way they deal with other common liabilities that are legally in one partner's name.
Any previous payment agreements would still remain in force.
Problems paying your personal tax
Prior year basis 'PYB' tax
The 2019 frozen tax continues to be payable according to the legislation that was in place during 2019. It is therefore the responsibility of the primary taxpayer in the marriage or civil partnership. This stays the case even after you move to Independent Taxation.
Most couples will decide together which option they choose to pay the liability, in the same way they deal with other common liabilities that are legally in one partner's name.
Prior year basis tax reform
Tax filing help
If you've not completed a tax return before or it's been a while since you last completed one, help is available to register for online filing or to complete a paper return.
File your personal tax return
Getting married or separating
You'll still need to let us know if you get married or permanently separate from your spouse or civil partner.
If you separate you will be taxed as a single person.
Tell Revenue Jersey you're married, in a civil partnership or married
Wife's social security pension paid from husband's contributions
Due to the way second earner's allowance works this is currently taxed as part of your husband's income.
If you are in receipt of a pension that's paid from your husband's contribution record you will need to declare this on your own tax return when you are independently taxed.
The requirement to tax the pension as your husband's income will no longer exist under independent taxation as second earner's allowance will no
When you're independently taxed, there are additional requirements if you run a business with your spouse or civil partner under a
A business partnership must complete a partnership return and comply with new economic substance rules.
If you already have a partnership agreement in place between you and your spouse or civil partner, you should get advice from a qualified tax professional before you move to Independent Taxation in the voluntary phase.
Spouse or civil partner's permission
If you currently have permission to discuss your spouse or partner's tax (the primary taxpayer), this will be automatically cancelled once you move to independent tax.
Joint access to information from 2021
The law was changed from the year of assessment 2021, so that information can be provided to both spouses or civil partner's while they are being taxed under married or civil partnership tax law. This will not apply when you move to independent tax.
Tax agents authority
When you are independently taxed, you will make all the choices about how you manage your own tax affairs.
You may wish to appoint an approved qualified tax professional (tax agent) to deal with your tax affairs, especially if you have more complex tax circumstances.
If you currently have a tax agent looking after your tax as a couple, the current 'all communications' authority will continue to apply to the
There is no obligation to have a tax agent because your spouse or partner does, or to appoint the same tax agent.
If you decide to have a tax agent to deal with your tax when you are independently taxed, they will ask you to sign an 'all communications' authority.
Any existing agent authorities will only cover the tax of the person who signed the original authorisation form.
This will allow them to communicate directly with us about your tax affairs.
Independent tax consultations
A number of consultations have taken place to inform reform decisions that have led to independent taxation as the most appropriate way to modernise personal tax.
The results of all consultations before 2021 are summarised in this report.
Personal tax reforms