Income Tax and Social Security arrangements (FOI)
Income Tax and Social Security arrangements (FOI) Produced by the Freedom of Information office
Authored by Government of Jersey and published on 15 September 2022.
Prepared internally, no external costs.
Currently Jersey Telecom are advertising for a Finance Officer with the following worded advert -
"We are looking for a Finance Officer to join us on a permanent contract in either our Jersey or Guernsey office, or alternatively working remotely from the UK."
I would therefore like to know that should this position be taken up by a person remotely working in the UK.
What Income Tax will they be paying to the Jersey Tax Department under this arrangement?
What Social Security arrangements are in place and would they be entitled to benefits after six months despite not being physically present in the Island?
Individuals who are paid by an employer and perform their duties in Jersey are taxable on this work in Jersey.
A person who conducts their work outside of Jersey would be taxed in the that country unless they were also a Jersey resident. This would generally only occur if they were commuting from Jersey to work for a Jersey employer overseas.
If a person were a Jersey resident, they would be taxed in Jersey on their worldwide income, including overseas employment. A Jersey resident working in the UK would receive tax credits for tax paid in the UK in their Jersey income tax assessment.
To be an insured person, and therefore entitled to benefits for the purposes of Social Security, a person has to have been a Jersey resident. Employment in the UK would not allow a person to build up a contributions record that would entitle them to benefits in Jersey.
Although the personal circumstances the employee can have a significant bearing on the analysis, if the person was a longstanding UK resident who worked from the UK, they would most likely be paying UK tax and National Insurance, and they would have no recourse to Jersey benefits as a result of their employment.
This is in line with the expectations that the individual and their dependents would be accessing UK services such as health, education, etc., and they would be building an entitlement to benefits and a UK State Pension, and so should be contributing through tax and social security to these services.