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On Monday 12 October, the proposed Government Plan 2021-2024 was lodged by the Council of Ministers (see here).  This is the second “Government Plan”, a process that has subsumed the previous combination of the medium term financial plan and annual Budgets; in other words, the Government Plan is the process through which the Government outlines both its spending plans and its plans around revenue.  The document has over 200 pages of information, with the majority focussed on progress towards the delivery of this Government’s priorities and its spending plans.  This blog, however, is focussed on the outlined revenue/tax plans.

Income Forecast

Who would want to attempt to forecast Government’s income during a pandemic?  Well that is the job of the Income Forecasting Group, who have delivered their latest forecast as part of the Government Plan.

Unsurprisingly, the income forecast is significantly less from the forecast that was produced a year ago:






Downward adjustment to “total States income”





% downward adjustment





One element of the 2020 forecast that has held up is the impôts duties (the Jersey name for excise duties), this is largely explained by the fact that travel restrictions have meant that people have had to buy more duty paid tobacco rather than importing and consuming “duty frees”.

Immediate tax measures

The Government Plan contains few immediate changes to the Island’s tax system, with its focus on the CYB-PYB issue that is scheduled to be debated in the Assembly in the sitting commencing on 3 November 2020.  In terms of the changes to personal income tax exemption thresholds, the policy is one of steady-as-she-goes, with the continuation of inflation linked increases, which with inflation at such low levels, does not amount to very much.

Ordinarily, increases in impôts duties tend to grab the headlines, therefore the Council might have expected some positives from the decision to freeze the duty on alcohol – highlighting support for the hospitality industry through the pandemic and the recent introduction of minimum pricing for off-licence sales.

The Council is proposing to increase the following impôts duties:

        - Tobacco products are going up by inflation plus 5%, consistent with the policy established last year.

        - Higher increases are proposed to hand rolling tobacco and cigars, on the basis that the duty per kg of tobacco on those products is lower than that charged on cigarettes.

        - The duty on road fuels will increase by inflation plus 2p per litre, with that extra 2p being paid into the climate emergency fund (the balance on that fund being forecast to be £5.1m by the end of 2020).

The Government Plan also proposes changes to ISE fees, which are anticipated to raise an extra £3.5m from 2021 (i.e. from the ISE fees that will be paid in Q1 2021).  Although these plans have been discussed with the finance industry, the details of the proposed changes have not yet been released.

In addition, changes to stamp duty are proposed to reduce the amount of stamp duty/land transaction tax (“LTT”) paid where people are buying a house under an assisted ownership scheme; under this proposal, the stamp duty will be calculated based on the affordable price of the home rather than the open market value.  This seems a sensible step.

Future tax raising

The Government Plan then proposes that changes will be made that raise an additional £10m of revenue in 2024.  The delay in making changes to raise additional income, despite the challenges to the public finances outlined in the plan, reflects the economic challenges arising from pandemic; the words of the Fiscal Policy Panel from their August release that “The Panel does not recommend that large cuts in expenditure or new revenue streams are introduced quickly to close this structural deficit” are no doubt ringing in Ministers’ ears. 

In light of the time-lag, there is little detail of what the changes might be. Instead, the document outlines a smorgasbord of potential measures, including taxing corporate profits from the growing and production of medicinal cannabis and a vague reference to broadening the tax base.  Reference is also made to the discrepancy between the stamp duty payable on commercial properties and domestic properties worth more £500,000 – you are unlikely to get generous odds on how Government will propose that this discrepancy is removed.  Elsewhere in the document, there is a reference to reviewing the case to tax vaping in order “to dis-incentivise the use of vaping outside of strategies to reduce tobacco consumption”.

The Council of Ministers are also planning an urgent review of the sustainability of the Social Security Funds, which will include “a long-term plan and funding model for the Social Security Fund given the ageing population, the need to encourage greater retirement saving, and the pressure on its reserves brought about by the economic impact of Covid-19 and social restrictions”.  The Government Plan includes a planning assumption of £29.3m of “sustainability measures” which boost the value of the Social Security Fund in 2024.  This review will, apparently, be finalised during 2021 and will also consider solutions to ensure that all health costs are funded on a sustainable basis. 

Other tax reviews

Moves towards introducing independent taxation has taken a back seat while the focus has been on the CYB-PYB issue, however the Government Plan states that the goal remains to introduce independent taxation from 2022 – this seems optimistic.

After discussion with the finance industry, domestic CRS reporting by deposit taking institutions is being progressed with draft Regulations promised shortly; reporting will commence in 2022 (in respect of 2021), but a note of caution that the document states that such reporting will be carried out “by banks in the first instance” (emphasis added).

Many people will not be aware that there is a review of the tax deductibility of interest by businesses.  There have been a couple of meetings with the accountancy profession, but little detail has been released at this stage.  We are promised a detailed framework which will be released for consultation. Jersey Revenue would like to complete this review in 2021.

Work is continuing on the taxation of the transfer of “enveloped properties”, under which Government is seeking to tax Jersey real estate transfers which currently escape both stamp duty and LTT.  Again draft Law is due to be released shortly for consultation.  No revenue implications from the proposed changes is included in the Plan – perhaps it will contribute to the £10m target outlined above.

We are also promised a review of the personal tax residence rules (i.e. the rules around when an individual becomes tax resident in Jersey) to ensure that the rules are appropriate and more work is promised on potential environmental taxes in support of the Island’s carbon neutral strategy.  

Finally, the document makes reference to the cross Government work being undertaken so that Jersey can respond appropriately to the initiatives issued by the OECD regarding the future international tax landscape (the OECD providing their latest progress update on the same day that the Government Plan was released) – clearly this work is of the utmost importance to securing the future success of the Island.