States Members have today approved the amendment law to enable Prior Year Basis (PYB) taxpayers to be moved to Current Year Basis (CYB) from next year.
Members voted 41 in favour of the proposition, two against and there was one abstention.
PYB taxpayers do not need to take any action, and PYB taxpayers who pay their taxes ‘on account’ do not need to make their usual November payment.
Revenue Jersey will automatically move the payments PYB taxpayers have made this year to cover their 2020 tax bill instead of their 2019 tax bill. All PYB taxpayers will have their 2019 tax bill frozen and will not need to begin paying it until 2025.
From 2021 onwards PYB taxpayers will become CYB taxpayers, and they will start paying tax on the income they earn. Exact tax bills for 2020 will be calculated and confirmed once PYB taxpayers have completed and submitted their 2020 tax return.
Minister for Treasury and Resources, Deputy Susie Pinel, said: “I’m delighted that my proposition has been approved. This change has been long overdue and brings all of the Island’s taxpayers onto a level footing.
“We’ll be writing to all PYB taxpayers in the coming days to outline the timeline for the changes and confirm that they don’t need to do anything now. For ‘pay on account’ customers this also means they do not have to make their November payment, which would have been due at the end of this month.
“I would, though, encourage PYB taxpayers to complete their 2020 tax return as early as possible next year so Revenue Jersey can more quickly assess and inform them of their up-to-date tax position.
“While the payment Regulations haven’t yet been finalised, PYB taxpayers can start to think about how they might want to pay their frozen 2019 tax bill from 2025. This could be through regular payments until 2042, or in full when they retire using a pension plan or another financial investment.”
The Regulations that outline how PYB taxpayers will pay their 2019 tax bill are under development, following feedback from the survey, focus groups and States Members. Revenue Jersey will publish the draft Regulations in December, and the States Assembly will debate them in early 2021.
More information on the proposal is available on the Government of Jersey website.