States of Jersey Financial Report and Accounts 2015.

FINANCIAL REPORT AND ACCOUNTS 2015

R.63/2016

FINANCIAL REPORT

AND ACCOUNTS

2015

1

2

Contents

1  The Minister's Report  5

1.1  The Minister's Report. . . . . . . . . . . . . . . . . . . . . . 7

2  The Treasurer's Report  11

1. Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2. Summary ofPerformance . . . . . . . . . . . . . . . . . . . 12
3. General Revenue Income. . . . . . . . . . . . . . . . . . . . 16
4. Departments'RevenueExpenditure . . . . . . . . . . . . . .20
5. States TradingOperations – NetRevenueExpenditure . . . .25
6. Other IncomeandExpenditureandAccountingAdjustments26
7. Capital Expenditure. . . . . . . . . . . . . . . . . . . . . . .31
8. The StatesBalance Sheet. . . . . . . . . . . . . . . . . . . .36
9. ExplanationoftheStructureoftheStatesofJersey . . . . .49
10. Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11. Corporate SocialResponsibility . . . . . . . . . . . . . . . .55
12. Conclusions. . . . . . . . . . . . . . . . . . . . . . . . . . .56

3  Statement of Responsibilities for

the Financial Report and Accounts 57 4  Remuneration Report  59

1. RemunerationPolicy . . . . . . . . . . . . . . . . . . . . . .61
2. Council ofMinisters . . . . . . . . . . . . . . . . . . . . . .61
3. AccountingOfficers . . . . . . . . . . . . . . . . . . . . . .62
4. SegmentalAnalysisofStaff . . . . . . . . . . . . . . . . . .66
5. MedianRemuneration . . . . . . . . . . . . . . . . . . . . .68
6. Gender Diversity . . . . . . . . . . . . . . . . . . . . . . . .68

5  Governance Statement  69

1. Scope ofResponsibility . . . . . . . . . . . . . . . . . . . .71
2. The PurposeoftheGovernance Framework. . . . . . . . . .71
3. Governance FrameworkandStructures . . . . . . . . . . . .72
4. Review ofEffectiveness . . . . . . . . . . . . . . . . . . . .88
5. SignificantGovernanceissues . . . . . . . . . . . . . . . . .91
6. Closing Statement . . . . . . . . . . . . . . . . . . . . . . 100

6  Introduction to the Accounts 101

1. Changes inAccountingStandards . . . . . . . . . . . . . . 103
2. Explanationofthecontentsofthe Accounts. . . . . . . . . 104

7  Auditor's Report  107

1. IndependentAuditors'ReporttotheMinisterforTreasury andResourcesoftheStatesof Jersey. . . . . . . . . . . . 109
2. Report oftheComptrollerandAuditorGeneralto

the States Assembly . . . . . . . . . . . . . . . . . . . . . 110

8  Primary Statements  111

1. States ofJerseyConsolidatedStatementofComprehensive NetExpenditure(OperatingCostStatement)fortheyear ended31December 2015 . . . . . . . . . . . . . . . . . . 113
2. States ofJerseyConsolidatedStatementofFinancial Position(BalanceSheet)asat31December 2015 . . . . . 114
3. States of Jersey Consolidated Statement of Changes in Taxpayers' Equity for the year ended 31 December 2015 . . . . . .115
4. States ofJerseyConsolidatedStatementofCashFlows

for the year ended 31 December 2015 . . . . . . . . . . . . 116

9.3a  Restated consolidated Statement of Financial Position

as at 31 December 2014 . . . . . . . . . . . . . . . . . . . 136 9.3b  Restated consolidated Statement of Financial Position

as at 1 January 2014 . . . . . . . . . . . . . . . . . . . . . 137 9.3c  Restated Consolidated Statement of Comprehensive Net Expenditure for the year ended 31 December 2014 . . . . . 138

4. Segmental Analysis. . . . . . . . . . . . . . . . . . . . . . 139 9.4a SegmentalAnalysis – StatementofComprehensiveNetExpenditurefortheyearended31December 2015 . . . . . 140 9.4b SegmentalAnalysis – StatementofFinancialPosition

as at 31 December 2015 . . . . . . . . . . . . . . . . . . . 141 9.4c  Segmental Analysis – Statement of Comprehensive

Net Expenditure for the year ended 31 December 2014

(Restated). . . . . . . . . . . . . . . . . . . . . . . . . . . 142 9.4d  Segmental Analysis – Statement of Financial Position

as at 31 December 2014 (Restated) . . . . . . . . . . . . . 143

5. Revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
6. Expenditure. . . . . . . . . . . . . . . . . . . . . . . . . . 145
7. Non-CashItemsandotherSignificantItemsincluded

in Net Revenue Expenditure . . . . . . . . . . . . . . . . . 146

8. InvestmentIncome . . . . . . . . . . . . . . . . . . . . . . 147
9. Gains andLossesonFinancialAssets . . . . . . . . . . . . 148
10. Social BenefitPayments . . . . . . . . . . . . . . . . . . . 149
11. StaffCosts . . . . . . . . . . . . . . . . . . . . . . . . . . 150
12. Grants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
13. Finance Costs. . . . . . . . . . . . . . . . . . . . . . . . . 157
14. Property,Plantand Equipment. . . . . . . . . . . . . . . . 158
15. IntangibleAssets . . . . . . . . . . . . . . . . . . . . . . . 162
16. Non-CurrentAssetsHeldforSale . . . . . . . . . . . . . . 163
17. LoansandAdvances . . . . . . . . . . . . . . . . . . . . . 164
18. Available ForSaleFinancial Assets. . . . . . . . . . . . . . 165
19. Infrastructure Investments. . . . . . . . . . . . . . . . . . 168
20. InvestmentsheldatFairValuethroughProfitor Loss. . . . 169
21. Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . 170
22. Trade andOther Receivables. . . . . . . . . . . . . . . . . 171
23. Cash andCash Equivalents. . . . . . . . . . . . . . . . . . 173
24. Trade andOtherPayables . . . . . . . . . . . . . . . . . . 174
25. External Borrowings . . . . . . . . . . . . . . . . . . . . . 175
26. Currency inCirculation . . . . . . . . . . . . . . . . . . . . 176
27. Finance LeaseObligations . . . . . . . . . . . . . . . . . . 177
28. Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . 178
29. DerivativeFinancial Instruments. . . . . . . . . . . . . . . 179
30. Past ServiceLiabilities . . . . . . . . . . . . . . . . . . . . 181
31. Defined BenefitPensionSchemesRecognisedon

the Statement of Financial Position . . . . . . . . . . . . . 183

32. Capital Commitments. . . . . . . . . . . . . . . . . . . . . 185
33. Commitments underOperatingLeases . . . . . . . . . . . 186
34. Risk ProfileandFinancial Instruments. . . . . . . . . . . . 187
35. SOJ CommonInvestmentFund . . . . . . . . . . . . . . . 195
36. Contingent AssetsandLiabilities . . . . . . . . . . . . . . 199
37. LossesandSpecialPayments . . . . . . . . . . . . . . . . 200
38. Gifts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201
39. Related Party Transactions. . . . . . . . . . . . . . . . . . 202
40. Third PartyAssets . . . . . . . . . . . . . . . . . . . . . . 207
41. Entities withintheGroupBoundary . . . . . . . . . . . . . 208
42. Social SecurityFundsNotes . . . . . . . . . . . . . . . . . 210
43. Events aftertheReportingDate . . . . . . . . . . . . . . . 214

44. PublicationandDistributionoftheFinancial

Report and Accounts . . . . . . . . . . . . . . . . . . . . . 215

10  Statement of Outturn Against Approvals 217

9  Notes to the Accounts  117 10.1  Statement of Outturn against Approvals. . . . . . . . . . . 219

1. SignificantAccountingPolicies . . . . . . . . . . . . . . . 119 10.2  Accounting Policies. . . . . . . . . . . . . . . . . . . . . . 221
2. Critical AccountingJudgementsandkeysourcesof  10.3  Revenue Expenditure. . . . . . . . . . . . . . . . . . . . . 223 estimationuncertainty . . . . . . . . . . . . . . . . . . . . 132 10.4  Capital Expenditure. . . . . . . . . . . . . . . . . . . . . . 227
3. Changes toAccounting Standards. . . . . . . . . . . . . . 135 10.5  Reconciliations . . . . . . . . . . . . . . . . . . . . . . . . 231

3

The Minister's Report 4

1  The Minister's Report

The Minister's Report

5

The Minister's Report 6

1.1  The Minister's Report

Throughout 2015 the government's strategic priorities have informed our financial planning. We have been focussing on the future by prioritising Health, Education, growing the economy, working towards sustainable public finances and investing in infrastructure.

While our economy and income are growing there are challenges ahead that our financial strategy must take

into account. We are investing in health services to respond to the global challenge of an ageing population; we are improving standards and opportunity in our education system; working to sustain our strong economic performance and international reputation, and investing

in infrastructure and housing, while also maintaining a disciplined and prudent management of our public finances.

We have been investing in reforming the public sector to help free up funds to invest in the agreed priorities. We have been taking a long hard look at what services government should deliver and how essential services should be provided.

There is absolutely no room for complacency, especially

as global economic conditions remain fragile, however it is pleasing to see the States Accounts reflecting the success of the strategies for growing the economy. The economy returned to growth in 2014 and GVA was up nearly 5% in real terms. This was driven by significant increases in profit from financial services which have contributed to a steady, but improved, income. The Fiscal Policy Panel also forecast further growth in 2015 and into 2016, although they have emphasised the risks to the economic outlook.

The figures also demonstrate departments' success in delivering their services while making an ongoing 2% saving, as required in Budget 2015.

As well as the 2% saving ministers agreed further one-off reductions to budgets of £5 million. Departments managed these reductions in budgets and also underspent by

£24.9 million. This provided £6 million to be returned to the States current account and £6 million to be carried forward into 2016 for the Long Term Care Fund.

These measures improved the position of our finances without affecting the delivery of ongoing projects and agreed priority areas.

This report underlines the strength of Jersey's finances. It also offers islanders the opportunity to scrutinise the way Government departments fund their services and how effectively the Government has prioritised spending while moving towards balanced budgets.

The strength of the balance sheet is evident. It places the Island in the enviable position of maintaining confidence and security for the future with the flexibility to invest in priority areas, like health and education, while steadily restoring the balance to our finances without threatening economic recovery.

Our strength in reserves is often commented upon and

is reflected in our excellent AA international credit rating from Standard and Poor's. The amending of the rating from AA+ to AA was not a reflection of the Island's current performance or of the strength of our finances. The rating adjustment reflects the agency's reassessment of all small jurisdictions, derived in part from the UK's forthcoming referendum on EU membership and their anticipation of increasing regulatory demands.

Investment returns were positive in 2015. While they did not match the performance of the previous two years, which saw outstanding returns, the returns reflected market conditions and continued to outperform the three year benchmark used to monitor performance. We must remember that our larger funds are managed under long term investment strategies.

The funding of the Long Term Care scheme, which began in 2014 through contributions from the States, continued in 2015 with residents paying their first contributions

into the Fund. The scheme provides financial support to Jersey residents who are likely to need long-term care, either in their own home or in a care home. This scheme is an important initiative in addressing the financial consequences for people and government, with care costs predicted to more than double by 2044.

The Minister's Report

7

Between now and 2020 we plan to invest £96 million

more in health; £27 million more in education; £20 million for projects to boost economic and productivity growth,

and a further £168 million in the capital programme. This investment will run alongside the strategy agreed by the States Assembly to balance the books by 2019, through savings, restructuring, economic growth and some charges. We are making difficult decisions now that will benefit future generations, so we can maintain Jersey as a place we can be proud to pass on to our children and grandchildren.

2015 saw investment of £45.6 million in important infrastructure, such as the new Police Station, a new school in St Martin and £4.7 million on expanding primary school capacity. It is important that this investment continues with a further £168 million earmarked over

the period 2016–2019, for projects including a new

Les Quennevais school. Further plans are also being developed for the delivery of a new hospital.

In October 2015 Ports of Jersey was incorporated as a wholly owned States subsidiary, while Andium Homes had its first full year of operation after its incorporation the previous year. In 2015 Andium spent £27.3 million from the £250 million public bond issued in 2014 to bring more homes up to the Decent Homes Standard and to develop much needed new homes.

Like many other governments we need to respond to the growing demand on services of an ageing population. Unlike most other governments, we start from a strong position and it is essential that we make the most of that advantage. We will press forward with improvements to our education system, effective strategies to maintain our strong economy and deliver efficient, effective services to ensure we can sustain provision into the future.

Thanks

I would like to thank all the staff across the States of Jersey for their contribution throughout the year. I would like to thank my Assistant Minister during 2015, Deputy Tracey Vallois, and my current Assistant Minister, Connétable John Refault, for their hard work and support. I would also like to extend a welcome to our new Comptroller of Taxes, Richard Summersgill, who is contributing many new ideas to the ongoing reform of our tax system.

I am determined that we maintain strong public finances and balance the books as the economy recovers, while planning prudently to meet the funding challenges we

face rather than pass problems onto future generations. Fundamental to this objective is the need to restructure the public sector and change the way services are delivered.

Senator Alan Maclean

Minister for Treasury and Resources

Date: 31st May 2016

The Minister's Report 8

2  The Treasurer's Report

The Treasurer's Report

9

The Treasurer's Report 10

1. Highlights

These accounts include the results against income and expenditure approved by the States Assembly in the Budget and Medium Term Financial Plan but the financial statements also include the results of the wider States of Jersey group which includes entities such as Andium Homes Limited, the States of Jersey Development Company and Ports of Jersey.

2015 is the final year of the first MTFP. That three year MTFP period has coincided with a period of global financial uncertainty, and there has been some nervousness around the likely position of States of Jersey finances as a consequence, but the final outturn for 2015 is more positive than that projected in the MTFP. The highlights below draw out some high level points of interest.

The Treasurer's Report

11 Highlights

2. Summary of Performance

The following summary of performance focuses on the income and expenditure approved by the States Assembly but does also include a summary of the other consolidated areas outside of the approval framework.

• Income Tax was £12.9 million more than 2014 and £14.6 million more than forecast in Budget 2016.

Within the increase from 2014, Business Tax increased by £4.3 million and Personal Tax £8.6 million, of

which, £6.7 million was due from the 2015 estimated assessments for current year basis tax payers reflecting the year on year increase in the number of CYB tax payers.

• Goods and Services Tax (GST) was £4.8 million more than 2014 and £1.3 million more than forecast in Budget 2016 due to a reduction in the bad debt provision and a net increase in activity as well as a low number of one- off high value items.

• Stamp Duty was £3.1 million more than 2014 and £2.1 million more than forecast in Budget 2016 which reflects the continued upturn in the housing market and the impact of duty from higher value property purchases.

• Fines and Other Income was £13.9 million more than 2014 and £2.4 million more than forecast in Budget 2016 mainly due to the full year impact of the Andium Homes return and additional dividends received.

Departmental Near Cash Net Revenue Expenditure (the amount spent on day-to-day activities) was £22.9 million higher than 2014 and £24.9 million lower than the final approved amount after carry forwards and other allocations at £697.0 million.

• Social Security expenditure was £13.0 million less than budgeted after making a £1.4 million grant to the Long Term Care Fund mainly due to a £10.9 million underspend in Income Support, £8.0 million of which was a result of weekly benefit claim numbers being consistently lower than budgeted.

• Transport and Technical Services spent £3.2 million less than budgeted due to greater than anticipated tipping fee income from several large construction projects and staff cost management across the department partly offset by an underachievement of income from electricity generation at the Energy from Waste plant due to the low unit rate.

• Chief Minister's Department spent £1.8 million less than budgeted mainly due to the timing of spend in respect of the Public Sector Reform programme, staff and training savings within Human Resources and equipment

The Treasurer's Report 12

purchase and training underspends in Information Services which were partially offset by an overspend in the Policy Unit.

• Education Sport and Culture spent £1.7 million less

than budgeted mainly due to underspends on Higher Education grants reflecting a downward trend in students accessing higher education off-island in recent years.

• Departments have carried forward £19.1 million of these underspends of approved expenditure into 2016 for projects and other spending pressures with the remaining £5.9 million returned to the States' current account.

In addition, removing the £22.5 million of Budget Measures planned to be returned to the consolidated fund, £10.1 million of Central Contingency was not allocated in 2015. This has be carried forward into 2016.

Depreciation charges relating to the use of Property, Plant and Equipment by the States for Ministerial and Non-Ministerial departments broke even against budget but were £14.6 million lower than 2014 due to the full year impact of incorporating the Housing Department and adjustments to asset lives in Transport and Technical Services in 2014.

After adjusting for other Non-Cash charges, Trading Operations, Special Funds and other accounting adjustments there was an accounting deficit of

£41.9 million for the year – this in general relates to the amounts that are not available for everyday expenditure approved by the States Assembly.

• Special Funds and Social Security Funds saw Net Income of over £62.7 million comprising investment returns and contributions. These funds are identified for specific purposes in law.

• The Common Investment Fund generated significant income for the States of Jersey during 2015, earning net income of £59.1 million on States of Jersey group assets, increasing the net asset position to £2.5 billion. This level of return is significantly lower than the previous few years due to market conditions.

• The most significant Accounting Adjustment was the £23.3 million decrease in the pension liabilities which

is predominantly the impact of a decrease in the actuarial valuation of the amount required to settle the Public Employees Contributory Retirement Scheme (PECRS) pre 87 debt (£26.7 million decrease) and Jersey Teachers Superannuation Fund (JTSF) pre- 2007 debt (£3.6 million increase). This was in part due to the payment of £20.7 million from Jersey Airport and Harbours to settle their share of the PECRS pre-87 debt prior to incorporation.

The States spent £45.6 million on Capital projects in the year, including creating additional primary school capacity and progressing the new Police Headquarters. The States Balance Sheet remains strong.

• The States group overall holds Property, Plant and Equipment valued at £3.4 billion, including £0.7 billion of Social Housing assets now held by Andium.

• The value of Strategic Investments in utility companies increased by £45.2 million, and are now valued at £362.9 million inclusive of the Jersey Water Preference Share.

The Treasurer's Report

13

Financial Report and Accounts 2015

At a Glance – Financial Results

TABLE 1 – SUMMARY OF FINANCIAL RESULTS

(657,033) States Net General Revenue Income 2 (691,744) (34,711) 674,163 Departmental Net Revenue Expenditure – Near Cash 3,4 697,031 22,868

59,232 Departmental Depreciation 5 44,676 (14,556)

19,357 Departmental Net Revenue Expenditure – Other Non Cash 5 38,755 19,398 (2,947) Trading Operations Net Revenue Expenditure 6 18,824 21,771

(157,595) Net Revenue Income of Special Funds 7 (62,658) 94,937

6,692 Net Revenue Expenditure of Consolidated Entities 7 21,050 14,358 40,339 Other Expenditure/(Income) 11 (24,785) (65,124)

735 Consolidation Adjustments 11 708 (27)

* A reconciliation to the Statement of Comprehensive Net Expenditure on page 113 is provided in Table 12 on page 30.

2014 actuals have been restated to reflect the change in revenue recognition for Current Year Basis personal income tax, a prior period adjustment in Social Security accruals and the impact of a restatement of assets now held by Ports of Jersey. For further information see Section 6.1 .

The Treasurer's Report 14

Losses 0n disposal

non-current assets Impairments

£40m £13m Finance Cost Depreciation and

Amortisation £25m

£68m

Grants and subsidies  Taxation Revenue STATES OF JERSEY GROUP payments £544m

£43m

2015 CONSOLIDATED INCOME

AND EXPENDITURE

Other Operating

expenses

£240m

OUT IN

Social Security £1.15b £1.11b £191m

Contributions

Staff costs

£371m

Island rates, duties, fees, fines and penalties

£106m

Sales of goods

and services

£163m

Social Benefit Payments Investment Income £363m Other Rate £94m

Non-Ministerial States  £13m Funded Bodies and the

Depreciation

States Assembly

£35m £45m

Other Ministerial

Departmens Net Income

£122m Tax STATES ASSEMBLY APPROVED

£458m INCOME AND EXPENDITURE

2015 ACTUAL Social Security

£177m

OUT IN

£742m £692m

Home Affairs Total Net Revenue Total General Goods and £49m Expenditure  Revenues Income Services Tax

+ Depreciation £85m

Impôts Duties £54m

Health and

Social Services Stamp Duty £203m £29m

Education, Sports and  Island Rate Fines and £C1u1lu2rme Deficit £12m Oth£e5r I4nmcome

£50m

The Treasurer's Report

15

3. General Revenue Income

All references to 2015 forecast' are based on the most recent published forecast for 2015 which was included in the Budget 2016.

2014 Actual

A2c0t1u5al

2015 £673.3m Forecast

5.3% higher than last year

2.7% better than the 2015 forecast

All charts in this section apply rounding.

The largest element of income received by the States is General Revenue Income', which is made up of income to the Consolidated Fund covered by the Annual Budget Statement and includes taxes, duties and investment income.

In the Budget Statement, General Revenue Income is voted net of directly related expenditure, such as

Irrecoverable Debts or Investment Management fees, to represent the amount that is available to spend on providing services. Net General Revenue Income for 2015 was £691.7 million, compared to £657.0 million for 2014 largely as a result of an increase in Income Tax of £12.9 million and £13.8 million from the first full year of Andium Homes returns. Income from GST and Stamp Duty was also higher than 2014 by £4.8 million and £3.0 million respectively.

Directly related expenditure totalled £3.3 million in 2015 (2014: £3.7 million), giving gross General Revenue Income of £695.1 million. The remainder of income received by the States includes charges raised by departments included in their cash limits and income relating to Trading Operations and Special Funds.

WHERE CAN I READ MORE?

Details of directly attributable expenditure for each type of General Revenue Income are included in The General Revenue Pages in the Unaudited Annex to the Accounts.

FIGURE 1 – BREAKDOWN OF NET GENERAL REVENUE INCOME RECEIVED

Fines and Other Income

Island Rate £54.0m £11.9m

Stamp Duty

£29.0m

Impôts Duty

£54.1m

£691.7m £457.6m Net Income Tax

Goods and

Services Tax

£85.0m

The Treasurer's Report 16

Net Income Tax

2014 Actual

A2c0t1u5al Fo2r0e1c5ast

2.9% higher than last year

3.3% better than the 2015 forecast

Income Tax comprises two main elements, Personal Income Tax and Company Income Tax.

Personal Income Tax

Personal Income Tax is a standard 20% rate of tax with a limited number of allowances/reliefs. To protect the lower to middle income earners, a separate calculation is also performed using exemption thresholds and a greater number and value of reliefs, but with a higher tax rate (26% from 2014 year of assessment). The lowest of the two tax calculations is then used to determine the tax charge. Therefore individuals will be charged no more than 20% tax on their income. This is explained in

a video available on the States' website: http://www.gov.je/ TaxesMoney/IncomeTax/Individuals/ AllowancesReliefs/ Pages/MarginalCalculation.aspx

Previously, personal income tax received, both from current year and prior year basis tax payers, was recognised one year in arrears. 2015 saw a change in accounting policy to recognise current year basis income tax in the current year (i.e. 2015) based on estimated assessments. Prior years have been restated to reflect the new policy.

Company Income Tax

Companies pay tax under the 0/10 Regime. Three tax rates are possible:

• 0% – all non-financial service entities (except those at 20% below).

• 10% – Financial Services Companies (a company registered, or holding a permit, by virtue of various Laws administered by the Jersey Financial Services Commission).

• 20% – Utility Companies, Rental and Property Development activities.

Restated for the new policy, net Income Tax for 2015 was £457.6 million which is £12.9 million, 2.9%, more than 2014. Within this, Business Tax increased by £4.3 million and Personal Tax £8.6 million, of which, £6.7 million was due from the 2015 estimated assessments for current year basis tax payers reflecting the year on year increase in the number of CYB tax payers.

Net income tax restated was £14.6 million or 3.3% more than the 2016 Budget Forecast formulated in September 2015 and prepared under the old recognition basis.

As such Personal Tax accounts for the majority of the favourable variance at £12.8 million, of which £6.7 million is due to the effects of recognising CYB one year earlier than forecast. Business Tax accounts for the remaining £1.8 million of the variance.

Goods and Services Tax

2014 Actual

A2c0t1u5al Fo2r0e1c5ast

6.0% higher than last year

1.5% better than the 2015 forecast

Goods and Services Tax is a consumption tax of 5% on imports and supplies made in Jersey. The underlying principles are that the tax is low, broad , simple and

fair. As a result there are a limited number of reliefs. Businesses within the financial services industry who generally have the majority of their activity outside Jersey may apply to be approved as an International Services Entity (ISE) for GST purposes. They pay a flat rate annual fee instead of accounting for GST.

Income from GST was £4.8 million or 6.0% higher than 2014 due to a combination of the reduction in the provision for bad and doubtful debts and net increases in activity across sectors. In particular import GST saw a £0.9 million increase year on year due to a low number of one-off high value items being imported into the Island.