In the same States sitting that government debated – and rejected – proposals from JDA Deputies Trevor Pitman and Geoff Southern, that would have brought increases to the minimum wage of between either 16 or 8 pence respectively above the proposal from the Social Security Minister, we were interested to also note the answer to Trevor’s written question No. 17 on 1.1.K taxation as indicated below.
“Given that 1(1)(k) classified residents fall into two categories; namely those who were granted residence before current regulations were put in place, and those who have been granted residency since, will the Minister list the number of individuals by year for the period 2005 to 2008 inclusive, who paid tax within the following brackets –
(a) less than £20,000;
(b) between £20,000 and £50,000;
(c) between £50,000 and £70,000; and,
(d) between £70,000 and £99,000?
If any 1(1)(k) classified residents do fall into these categories, would the Minister advise how this fits into the framework outlined within the relevant income tax legislation?”
Trevor has promised to write an article relating specifically to this subject in the next week or two.
In the meantime we publish the figures below for people’s comments. Whether one supports the concept of 1.1.K residents or not, the actual figures below teased out by Trevor’s question to the Minister for Treasury & Resources make interesting reading. Not least being that somehow the Minister managed to overlook answering the crucial aspect of just how some of these surprising figures actually fitted into what is written into the legislation.
the current regulations to which Trevor’s question refers are that of Article 135A of the Income Tax (Jersey) Law, 1961. It should also be noted, of course, that this Article applies only from 1st January 2005 to any person who is given consent under 1(1)( k) housing rules to acquire and occupy property in the Island.
Under this Legislation, those individuals granted 1(1)(k) status are meant to be taxed at the following rates:
The first £1m of foreign income at 20%
The next £500,000 of foreign income at 10%
The balance of foreign income at 1%
All Jersey source income at 20%
Those individuals who were granted such ‘status’ prior to the above date are not subject to the provision; but rather were able to arrange a ‘negotiated’ tax contribution. This presents a number of questions in itself as it has been argued that it is debatable whether or not any such possibilities actually existed within Jersey’s law at the time. One further question we know Trevor will be pursuing is whether there is any truth in the rumours of a small number of ‘high value’ residents actually paying tax that actually falls beneath the figure of £10.000.
With regular re-assurances that all 1.1.K residents contribute at least £100.000 in tax, many people in so-called ‘middle Jersey’, not to mention those on a minimum wage justified from within the likes of the Hospitality Association as being ‘offset by cheap food and accommodation’ (quoted on Channel Television) will be interested to say the least. After all, as so many States Members were happy to suggest during the debate on the minimum wage: it really is all a question of achieving ‘balance’…