A response to a freedom of information request has shown that last year £2.427 million owed to the public purse was deemed to be ‘irrecoverable’ by the States and will no longer be pursued.
Between 2014 and 2017 a further £10 million was also written off.
The FOI response says that tax and social security debts can be written off for a ‘range of reasons’, with the five most common being:
- Bankruptcy.
- Serious illness or death.
- Hardship.
- Leaving Jersey and moving to an unknown location.
- Triviality.
Senator Sarah Ferguson, who chairs the Public Accounts Committee, which monitors States finances, said that she would raise the matter in a meeting with the Comptroller and Auditor General Karen McConnell this week.
She added that she would be most interested to know whether debts owed by people who have left the Island are being properly pursued by the authorities.
‘Tax and social security are more closely linked these days, so if people are leaving the Island without paying what they owe then it should be easier to track them down,’ she said.
‘Obviously, if someone is dead or bankrupt then you’re not going to get any money out of them. What is important is the amounts that have been left hanging and unpaid by people who have left.
‘If it is high amounts not being paid by a few people then it is definitely worth trying to track them down. But if it is small amounts that haven’t been paid by a large number of people then it probably wouldn’t be worth it.’
Deputy Scott Wickenden, who has just been appointed an assistant minister with responsibility for digital, said that technology should make it easier to track down people who owe money to the Island.
‘There are more means available these days to track people down. You have social media sites such as Facebook and Linkedin, for example,’ he said.
‘I don’t know how much resources the Treasury Department puts in to trying to track down people who owe tax in this way and it would be interesting to find out.
‘Also, with digital ID and the online portal coming you will get more people using government services online, so it will be easier for them to keep track of how much social security and tax they are due to pay.’
Assistant Treasury Minister Lindsay Ash said that he believed the issue of people leaving the Island without paying outstanding tax was much worse in the past.
‘The problem is not as bad as it used to be. You used to pay tax in arrears after arriving in Jersey and the situation you would get is people would come here not pay tax for a year and then leave when they got a tax bill at the end of the year,’ he said.
‘This was a problem in particular where there was cash-in-hand wages, like in the construction industry. Then they introduced the pay-as-you-earn system ten to 15 years ago. After that the tax take increased substantially.’
He added that a balance was required in allocating resources to pursuing tax and social security debts from outside the Island, so that the work is cost-effective.
‘The problem is that if people leave the Island and can’t be traced then it might not be commercially worthwhile trying to track them down because of the resources you have to put into it,’ he said.
‘At the end of the day you are using public money and have to get the balance right.’
FACTBOX:
Annual amounts of tax and social security written off:
2014 – £2.867 million
2015 – £3.077m
2016 – £2.672m
2017 – £1.729m
2018 – £2.427m
