Scrutiny seeks views on Independent Taxation Proposition
12 June 2023
The Corporate Services Scrutiny Panel (the Panel) has called for comments on the 'Stage Two of Independent Taxation' proposition – P.41/2023, due to be debated by the States Assembly on 18 July 2023. It details the final steps to complete the process of moving away from a taxation system in Jersey where couples are taxed differently according to their marital status. If passed by the States Assembly, the proposition will make independent taxation compulsory from 2025.
It is recognised that the proposed changes will impact couples differently based on their income and the proportion of the income proportioned to each partner. The proposition notes, while there would be no financial impact for most couples, that approximately 6,400 couples would see their tax liability increase with a direct switch over to independent taxation. This would arise in circumstances where one partner has an income below the single person's income tax threshold (£18,550 for 2023). As such, a compensatory allowance is being proposed, which aims to ensure, for at least ten years, through the provision of equitable relief that no one will experience negative financial impact as a result of independent taxation.
The Panel is gathering evidence from targeted stakeholders as to the details of the proposition, including:
Whether the proposition is adequately aligned to realistically address its intended aims.
Whether the proposition highlights any areas of unintended taxation-related consequences or risks which may have been overlooked.
Whether the proposed legislative approach and implementation is practically feasible.
Whether any practical challenges regarding the implementation are apparent.
Whether the proposed compensatory allowance process is sufficient to ensure that no one will be financially worse off.
The impact, both negative and positive, of the proposed changes.
The consultation process in respect of the proposition.
Whether the proposed changes have been appropriately communicated.
The impact of the proposition on children and young people.
Deputy Sam Mézec, Chair of the Corporate Services Scrutiny Panel, said: "At this final stage in implementing independent taxation, it's key that we diligently scrutinise the final proposal that is brought to the States Assembly. We would like to make sure the proposition is as well-informed and considered as can be to ensure the legislation is fit for purpose. For this reason, we are inviting stakeholders with knowledge that might help cast light on specific aspects of this proposition to come forward and approach the Panel with any views or information.'
A link to the page outlining the Panel's work is available here: Scrutiny calls for views on Independent Taxation proposals