The Government published the Draft Budget 2018 on October 3, 2017. This budget constructs the package of measures agreed in the Medium Term Financial Plan (MTFP), combining savings, efficiencies and revenue raising measures to enable investment in priority services. It supports working families by increasing tax allowances and it asks businesses and future high value residents to contribute a little more. The measures have to be approved by the States Assembly. It will generally apply from January 1, 2018. The summary of this budget are given below:
Corporate tax proposals
- The definition of financial services company extend. It means more financial services are provided within the scope of the 10% company income tax rate, raising £3 million per year
- Increase in ISE fees and more companies required to pay them. These fees are paid by regulated financial services businesses and they currently raise £9m per year.
- The profits of larger corporate retailers are subject to 20% tax. This will be applicable for retailers with taxable profits of at least GBP 500,000 per year with a tapering provision for the effective rate (0% to 20%) for retailers with taxable profits of between GBP 500,000 and GBP 750,000;
Individual tax proposals
- Income tax relief thresholds for working-age people will be increased by 2.5%
- Jersey’s personal tax free income allowance will be up to £14,900
- The limit of second earner’s allowance will be increased by £850 to £5,850
- Increase in the minimum annual tax payable by new High Value Residents from £125,000 to £145,000. Minimum tax contribution to be reviewed every five years from 2023. This will apply from January 2018.
Import Duty
- Increase in import duty on tobacco will be Retail Price Index (RPI) plus 5%, with a little higher increase for hand rolling tobacco.
- Import duties payable on diesel, petrol and alcohol in line with Retail Price Index (RPI) will be increased.
