BLOG: Jersey tax ‘PYB’ to ‘ITIS’

Jersey personal tax collections moved from a 'prior year basis' (PYB) to an Income Tax Instalment System (ITIS) some years ago in 2006. To align all taxpayers, the States Assembly froze the 2019 tax bill for those still on the PYB. In 2024 an extension to the payment terms were announced, we provide an update on this tax matter.

In early 2024, the States Assembly announced an extension to the period of repayment from 2025 to 2027 for all PYB Jersey taxpayers to repay their frozen 2019 tax bill.

We take a look at the implications and provide some further information for individual Jersey taxpayers.

Before the Income Tax Instalment System (ITIS) was introduced, Jersey taxpayers paid their tax bill in one payment each year and there was no option to pay monthly instalments from salary.

New taxpayers would have a tax liability in their first year but would not have to pay tax until the following year, hence everyone paid their tax on a Prior Year Basis (PYB). The tax office would not know what taxpayers owed until they submitted their tax returns the following year.

The new ITIS system was introduced. All new taxpayers started to pay the ‘Current Year Basis’ (CYB) yet many taxpayers remained on the PYB system.

On 4 November 2020, the States Assembly approved to move all remaining PYB taxpayers onto a current year basis (CYB).

The 2019 tax liability was frozen, to be paid at a later date.

This meant that the payments an individual made in 2020 (against their 2019 tax liability) were used to pay their 2020 tax bill – thus they became a ‘current year’ taxpayer.

Any Islanders who registered for tax from 2006 onwards would automatically be on CYB and their ITIS rate would be calculated based on information provided as registration and estimated each year after that, based on the previous year’s tax assessment.

What’s the position today?

Ministers advised that the PYB payment scheme has been deferred from 2025 to 2027 to address economic factors affecting taxpayers.

Subject to States approval, the first instalment will now become due by 31 December 2027 and the last by 31 December 2043.

By this date all PYB taxpayers must have made a decision as to how they wish to make the repayment, there are three options available to them:

The 2019 tax bill is to be paid in full by 30 September 2026, either as one lump sum or a series of payments agreed with the tax office on an individual basis.

This option is only available if you have not reached Pensionable Age at the time you make the election. This option includes putting a financeable product/asset in place (most commonly a pension plan, property investments etc.) that will provide you with the money required to pay your PYB 2019 tax in full within 12 months of reaching Pensionable Age.

Individuals have the option to set up a payment plan agreement, spreading the payments over a number of years up to a maximum of 17. The plans must start in 2027.

N.B. there is a minimum amount to pay each year and the full amount must be paid by 31 December 2043.

You can calculate your payments over a number of different years on the below payment calculator.