When you employ staff in Jersey, you take on specific tax obligations. The first step is to register as an employer with the Government of Jersey. This allows you to fulfill your tax and social security contribution requirements.

Registering as an Employer

The first step is to register as an employer with the Government of Jersey. This allows you to fulfill your tax and social security contribution requirements.

Withholding Tax and Contributions

As an employer, you must deduct Income Tax Instalment Scheme (ITIS) and Class 1 contributions from your employees' wages.

• Income Tax Instalment Scheme (ITIS): This is Jersey's equivalent of income tax withholding. You deduct ITIS from your employees' wages and pay it to the government.

• Class 1 Contributions: These contributions go towards Jersey's social security system. There are two parts to Class 1 contributions:

  • Primary Contribution: This is deducted from your employees' wages before you pay them.
  • Secondary Contribution: This is paid entirely by the employer.

Filing Employer Returns

You must submit a combined employer return to the government. This return includes details about your employees' earnings, deductions made, and manpower information.

Employee Communication

It's your responsibility to provide your employees with a written notice of the amounts deducted from their wages, the tax rate applied, and a year-end summary.

Record Keeping

You are required to keep a record of all wages paid and deductions made for a period of six years.

In Jersey, a progressive income tax system is in operation. For the 2023 tax year, a basic rate of 20% is applied. Taxable income includes salary, overtime and holiday pay, bonuses and commissions, tips, redundancy payments (the first £50,000 is tax-free), and payment in lieu of notice.

Social Security Contributions

Employees in Jersey are required to pay social security contributions, which fund various benefits like pensions and sickness support. The employee contribution rate for 2024 is 6% on gross earnings, up to a monthly standard earnings limit of £5,450.

Long-Term Care Contributions

Residents of Jersey are also required to pay long-term care contributions to fund care for the elderly and those with disabilities. The rate varies based on income levels.

Tax Allowances and Deductions

Jersey offers various tax allowances and deductions that can reduce your overall tax burden. Some common allowable expenses include professional subscriptions, course and examination fees (if your employer covers the cost, it's not deductible), and motoring expenses for work-related travel. You may be able to claim a flat rate deduction for certain professions.

Key Information

The tax year in Jersey runs from January 1st to December 31st. Most employees have their income tax deducted through a system called ITIS (Income Tax Instalment System), so you may not need to file a separate return. For a breakdown of current tax allowances in Jersey, refer to the Government of Jersey's site.

In Jersey, the supply of services is subject to Goods and Services Tax (GST). The place of supply rules determine where the supply is considered made for tax purposes.

Place of Supply of Services

The general rule is that services are supplied where the supplier belongs. If your business is established in Jersey, your service supplies will generally be subject to Jersey GST.

However, there are exceptions for Business-to-Business (B2B) and Business-to-Customer (B2C) services. When supplying services to another business (B2B), the place of supply is usually where the customer belongs. For B2C services, there are specific rules for services such as telecommunications, broadcasting, and electronic services, and services relating to the use and enjoyment of land.

GST Registration

Compulsory registration for GST is required if your taxable turnover in the past 12 months exceeds £300,000 or you expect your taxable turnover in the next 30 days to exceed £300,000. Voluntary registration may be possible if your turnover is less than the compulsory threshold.

GST Rates

The standard GST rate in Jersey is 5%. Certain services are zero-rated, including exported services and services related to the international transportation of goods.

Charging and Collecting GST

You must charge GST on your taxable supplies of services, issue tax invoices that comply with Jersey's GST regulations, collect GST from your customers, and remit it to the Jersey tax authorities.

GST Returns and Payments

GST returns must be filed with Revenue Jersey. The filing frequency depends on your taxable turnover. Any GST due must be paid to Revenue Jersey on time.

Record Keeping

Accurate records of your business transactions, including sales invoices, purchase invoices, and GST returns, must be kept.

Important Note

GST law is complex. It is advisable to consult with a tax advisor for advice tailored to your specific business circumstances.

Jersey offers a highly competitive environment for many businesses with its standard corporate income tax rate of 0%.

Exceptions to the Zero Percent Rate

Certain types of businesses are exceptions to this rule. Financial services companies are taxed at a rate of 10%. Utility companies and income derived from owning or developing land and property in Jersey are subject to a 20% tax rate.

Relocation Support

Locate Jersey offers support to businesses looking to relocate to the island. This may include financial assistance, help with finding premises, and assistance with the immigration process.

Research and Development (R&D) Tax Credits

While Jersey does not offer specific R&D tax credits, innovative businesses may still be eligible for support through the Innovation Fund.

Other Incentives

Jersey is currently considering the implementation of a patent box regime. This could provide tax benefits for businesses that generate income from qualifying intellectual property. Additionally, Jersey has a network of double taxation agreements with various countries. These agreements can help prevent businesses from being taxed twice on the same income.

Important Note

It's highly recommended to seek advice from a qualified tax advisor to determine specific incentives that could benefit your business. They can help you navigate the available options and ensure you're maximizing the benefits.