Tax practices losing Island workers and money, farmers say
BUSINESSES are losing good employees and the Taxes Office is losing revenue because tax rates are not being calculated accurately enough for immigrant workers, leading figures in the agricultural sector have said.
Christine Hellio, who runs Manor Farm in St Ouen, and Peter Le Maistre, president of the Jersey Farmers’ Union, have both called for a review of how the ITIS rate for foreign workers is calculated when they arrive in Jersey.
Both of them claim that foreign workers are frequently taxed too little when they arrive and that they tend to leave, often without settling their unpaid tax arrears, when their ITIS rate rockets after a couple of years.
Their comments come as businesses in the retail, hospitality and agriculture sectors report increasing staff shortages as fewer foreign workers come to the Island.
It is believed that the drop in value of the pound and the growing attraction of other places for work has resulted in potential immigrants moving elsewhere.
Mrs Hellio said workers already in the Island move away after a couple of seasons due to soaring tax bills.
‘When workers come over here they often put them on a two or three per cent tax rate,’ she said.
‘Obviously they like that at first but in a couple of years’ time when the Taxes Office looks at how much they owe in arrears, they can suddenly put the rate up to something like 17 per cent.
‘And what happens? They decide to leave. It is very frustrating. I can spend a lot of time training staff and then I lose them all of a sudden because of this.’
She added: ‘The Taxes Office is also losing out on what they could collect. What they need to do is put the rate up to about five or six per cent from the start then this wouldn’t happen. That would help us retain staff.
‘The problem is that the States just does not listen to the agriculture industry like it should to resolve issues like these.’
Mr Le Maistre said he had discussions with the Taxes Office at the end of last year about making the ITIS rate more accurate for workers.
He said: ‘What can often happen is when they initially set the ITIS rates workers can underestimate how much they are going to earn. We pay them the minimum wage of £7.50 and give them a 41-hour working week, which would mean that they pay about three to four per cent ITIS.
‘A lot of them will do overtime, however, and earn more than they would with working standard hours, so should actually be paying more tax.’
He added: ‘The Taxes Office will, of course, want their money and if they put the ITIS rate up to 13 or 14 per cent, then a worker might decide to go back to Poland and not come back.
‘It’s not just the farms that lose out then, it’s Jersey because they lose the tax.’
The Taxes Office was contacted for comment.