JerseyTax Obligations Detailed

Discover employer and employee tax responsibilities in Jersey

Employer tax responsibilities

In Jersey, employers face several key tax obligations for their employees, including Social Security contributions, Income Tax, and potentially Manpower contributions.

Employer Contributions: 6.5% on gross earnings up to £5,800 per month, plus 2.5% on earnings between £5,800 and £26,442 per month.
Employee Contributions: 6% on gross earnings up to £5,800 per month.

Income Tax (ITIS)

Employers must deduct income tax from employee wages based on the employee's ITIS rate.
A tax exemption of £50,000 applies to redundancy or termination payments, with any excess taxed at the employee's current effective rate.
Payment is due 15 days after the end of each month. Direct Debit is recommended.

Manpower

Details regarding manpower contributions were not found in the provided sources for Jersey, Channel Islands. Generally, manpower contributions may refer to government programs related to employment services, training, or workforce development. More information can likely be found through Jersey's government websites.

Filing and Payment Deadlines

Combined Employer Return: Due 15 days after the end of each month. This return includes ITIS, Social Security, and Manpower information.
Benefits in Kind: Due by January 15th of the following year.

Additional Local Taxes

Jersey City: Employers within Jersey City are subject to a 1% payroll tax.

It is important to note that this information is based on available sources as of February 5, 2025, and may be subject to change. Consulting official government resources or a tax professional is recommended for the most up-to-date and specific guidance.

Employee tax deductions

In Jersey, employee tax deductions primarily consist of income tax and social security contributions.

Income Tax

Standard Rate: The standard personal income tax rate is 20%. This applies to most residents.
High Net Worth Individuals: For those approved as 2(1)(e) residents, a tiered system applies:
- 20% on the first £1,250,000 of worldwide income.
- 1% on any income exceeding £1,250,000.
- 20% on income derived from Jersey property or dividends from companies receiving Jersey property income.
- A minimum annual income tax contribution of £250,000 is required.
Income Tax Instalment System (ITIS): Employees and company directors have tax deducted directly from their salaries through ITIS. An "effective rate" is provided, representing the percentage deducted from gross pay.

Class 1 Contributions: For employees working 8 hours or more per week:
- Employee Contribution: 6% of monthly earnings up to a cap of £348 (as of December 2025).
- Employer Contribution: 6.5% on earnings up to £5,800 per month, plus 2.5% on earnings between £5,800 and £26,442 per month.
Lower Earnings Limit: A minimum earnings limit of £1,240 per year ensures full coverage for pension and benefit purposes. Contributions cease at pension age.
Class 2 Contributions: Applicable to non-employed residents.

Other Considerations

Worldwide Income: Jersey residents are taxed on their worldwide income.
Deductible Expenses: Certain work-related expenses not reimbursed by the employer can be deducted. Specific allowances exist for business travel and vehicle use.
Tax Return: An annual income tax return is required, declaring all income and claiming eligible deductions.

Important Note: This information is current as of February 5, 2025, and is subject to change. Consulting a tax professional is always recommended for personalized advice.

VAT

In Jersey, the Goods and Services Tax (GST) is a 5% tax on most goods and services.

GST Rates and Applicability

A standard 5% rate applies to most goods and services sold in Jersey, including imported goods.
Certain goods and services are zero-rated (0% GST), such as exported goods and services, prescription medicines, and certain land transactions between GST-registered persons.
Some goods and services are exempt from GST, including financial services, insurance, postal services, medical supplies provided by registered professionals, supplies by charities, certain childcare services, and some burial and cremation services.

GST Registration

Businesses making taxable supplies in Jersey must register for GST if their annual turnover exceeds £300,000 (or is expected to exceed this amount) in any 12-month period.
Voluntary registration is available for businesses below this threshold.
Non-established businesses, such as certain financial institutions, may be exempt from registration under the International Service Entity (ISE) scheme. Overseas retailers selling to Jersey consumers, including online marketplaces, must register if their annual sales to Jersey exceed £300,000. They can also register voluntarily.

GST on Imported Goods

As of July 1, 2023, all goods imported into Jersey by non-business persons are subject to GST if the value of the goods exceeds £60. Previously the threshold was £135. It is expected that eventually there will be no threshold. If GST hasn't been collected at the point of sale, it will be applied upon importation.
Consumers buying from GST-registered overseas retailers will pay the GST at the point of sale. The goods can then be imported without further GST charges at customs.

GST Filing and Payment

GST returns are typically filed quarterly. An annual filing option is available for businesses meeting specific criteria.
Returns and payments are due on the last day of the month following the reporting period (e.g., for the quarter ending March 31st, the return and payment are due by April 30th).
Penalties apply to late filings and payments.

Other Important Information

Group registration allows multiple associated businesses to register as a single GST group, simplifying transactions between group members.
There are no digital filing requirements like SAF-T.
The de minimis for GST on imports was lowered from £135 to £60 as of July 1, 2023, for goods sold to Jersey by unregistered retailers.

This information pertains specifically to the 2025 tax year in Jersey and may be subject to change in future years.

Tax incentives

Jersey's 2025 Budget introduces several tax relief measures for individuals and businesses.

Personal Income Tax

Personal Allowance Increase: The personal income tax allowance is increased to £20,700 for single individuals and £29,850 for married couples or civil partners.
Tax Bands: Income tax is calculated using marginal relief. The standard rate is 20% and the marginal relief reduces the effective rate to between 0% and 20%, depending on income.

Other Allowances and Reliefs

Second Earner's Allowance: £7,350
Child Allowance: £3,450 per child, with an additional allowance of £5,150 for certain circumstances.
Childcare Tax Relief: Standard relief is £7,050, higher relief for preschool children is £18,300.
Loan Interest Relief: Up to £4,500 for main Jersey residence.
Benefit in Kind: Maximum deduction of £250 against total benefits.
Retirement Annuity Relief: Deduction for pension contributions up to £50,000 or relevant earnings, whichever is lower.

Business Taxes

Corporate Income Tax: Generally 20% for most companies. Certain financial services companies are taxed at 0% and utility companies at 10%.
Group Relief for Stamp Duty: Reduced stamp duty of £180 for transactions between companies in the same group. A group is defined as a company and its subsidiary where control is established through holding 75% or more of shares, voting rights, or powers in the articles of association, and entitlement to 75% or more of the subsidiary's profits. This relief was revised from a nominal rate of £90 announced in an earlier budget proposal.
Excise Duties: Tobacco duty increased by 8.6%. Vehicle Emissions Duty (VED) increased by 5%, 15%, and 25% for the top three bands of non-commercial vehicles, respectively, and by 3.6% for commercial vehicles. Alcohol and fuel duties are frozen.
Small Distillers Relief: Expanded to allow producers distilling up to 20,000 liters of pure alcohol annually to qualify for lower duty rates.
Deductions for Accounting Services: Fees for accounting services are deductible when calculating taxable profits.

High Value Residents (HVR)

The HVR program offers a favorable tax regime and housing license for high-net-worth individuals looking to live and work in Jersey. This scheme allows HNWIs to rent or buy property in Jersey.

Property Tax Relief

Property Tax Deduction: Residents aged 65 or older or with a disability may be eligible for a £250 property tax deduction. Surviving spouses 55 or older may also qualify. Veterans may have access to additional tax breaks.

This information is current as of February 5, 2025, and might be subject to changes due to legislative amendments or future updates. You should consult with a tax advisor for personalized advice.