2023 budget tax summary

​Mini-budget

This is a summary of the amendments from the mini-budget agreed by the States Assembly.

Mini-budget proposition and report

Personal income tax amendments

Income tax exemption thresholds

The standard exemption threshold increased from £16,550 to £18,550.

The married / civil partnership exemption threshold increased from £26,550 to £29,750

Second earner's allowance

Second earner's allowance increased from £6,550 to £7,350

Child allowances

Child allowances increased from £3,060 to £3,450

Additional allowance increased from £4,590 to £5,150

Child care relief increased from £6,273 to £7,050

Enhanced (pre-school children) child care relief increased from £16,320 to £18,300 

2023 tax allowances and reliefs

GST

Offshore retailers

Although not part of the cost of living package of measures, the introduction of the obligation for offshore retailers to register under the GST Law is going to be moved from 1 January 2023 to 1 July 2023.

This will provide offshore retailers more time to change their systems to comply with the law. Consequently, the GST de minimis level will remain at £135 until 1 July 2023, when it will reduce to £60.

Social Security contributions

Temporary reduction in employee's Contributions

Class 1 contributions for earnings up to the standard earnings limit (SEL) are reduced to 4% from October to December 2022.

Government Plan

An overview of the budget headlines from the government plan.

Draft Finance (2023 Budget)

Company tax return deadline

Partnerships

All partnerships will file one combined notification each year, which will capture all relevant information relating to economic substance and income tax. The filing deadline will be 30 November, to align with the filing deadline for companies. Joint returns for general partnerships will cease.

Benefits-in-kind

All pedal bicycles (including e-bikes) and bus passes provided by employers to employees will be exempt benefits-in-kind.

Independent taxation

Couples may elect to be taxed independently for the year of assessment 2024. The election deadline is 31 July 2023.

High-value residents (HVRs)

The minimum income tax charge for ‘version 4’ of the HVR tax regime will increase from £145,000 to £170,000 for the year of assessment 2023 onwards.

Rent-a-room tax relief

For the year of assessment 2023 and future years, income of £10,000 or less from renting out a room in the home is exempt from income tax. The lodger must be over 18, unless they are placed by an appropriate organisation, for example a language college. Lodger income that does not qualify for this exemption will continue to be eligible for concessions B11 and B12. Further information is available in the rent-a-room tax relief report.

Stamp duty, land transactions tax (LTT) and enveloped property transactions tax (EPTT)

From 1 January 2023, the rate charged on properties other than main residences, for example buy-to-lets, will be 3 percentage points higher than the normal rate of stamp duty, land transaction tax and enveloped property transaction tax. Property developers will be exempt from the higher rate if the property is purchased as part of their trading stock. Further information on the exemption is available in part 1 of the property developers and the higher rate for stamp duty report.

Customs and excise duties

Tobacco duty is increased by 10.4%, following a backbench amendment. Vehicle emissions duty (payable when a vehicle is first registered in Jersey) is increased by 32% for most vehicles, with greater increases of 75% and 85% for vehicles that fall into the top two most polluting bands. Alcohol duty and fuel duty are frozen.

Administrative and technical changes

Distributions from capital profits

Distributions made out of capital profits of a company are exempt from income tax only if they are ‘realised’ capital profits.

Building sub-contractors

Building sub-contractors must be compliant with all revenue laws (rather than only the Income Tax Law) before an exemption certificate is issued.

Distributions from structures

A clarification is made so that distributions made out of structures, such as trusts, to non-Jersey residents are not subject to Jersey income tax. This aligns with the treatment under concession M1. A further change also ensures that pension annuities are not exempt from Jersey income tax.

Limited liability companies and ISE's

A Limited Liability Company (LLC) can register as an international services entity (ISE) under the GST legislation. This change is made following the LLC Law coming into force in September 2022.

Overseas retailers and GST

The recent changes (which are not yet in force) relating to overseas retailers are modified so that GST is charged at the point of sale in all cases, regardless of the GST status of the purchaser. The requirement for overseas retailers to register for GST comes into force on 1 July 2023.

Unpaid tax and ITIS rates

A legal clarification is made so that all unpaid tax (not just arrears) can be factored into the ITIS effective rate calculation.

Late payment surcharge

Following the move of all taxpayers to a current year payment basis (CYB), the 70% rule relating to the surcharge is no longer required. All payment-on-account taxpayers (40% and 50%) may be subject to the late payment surcharge.

Benefit in kind and motor vehicle valuation

The existing practice of freezing the value of a motor vehicle when it is assigned to an employee, for the benefits-in-kind calculation, is put on a statutory footing.​