JERSEY’S tax system may need changing as companies employ increasing numbers of overseas remote-working staff, according to an assistant chief minister.
Deputy Rowland Huelin said that during the recent consultation on the new Common Population Policy a number of businesses, particularly in financial services, reported they now had higher numbers of remote employees based in other jurisdictions and that this trend had been accelerated by the Covid-19 pandemic.
He said that changes may need to be made to ensure the Island captured the tax and social security contributions from these overseas workers.
Meanwhile, recruitment consultant Ben Le Feuvre, of Excel Recruitment, said he believed the Island should explore the opportunity of employing more overseas staff so the finance sector could continue to grow without placing too much demand on Jersey’s finite resources.
Recent research carried out by UK property consultants Cluttons found that the finance and insurance sectors had the ‘highest potential’ for remote working, with more than 75% of work within those industries suitable.
Deputy Huelin, who has political responsibility for population, said that across the world ‘Zoom cities and towns’ were being established where workers did their jobs remotely, and Jersey was being affected by the trend.
He said: ‘It’s happening already. We’ve got evidence of when we did our business workshops and that is something we have to address because currently our tax model is based on employees in Jersey and that is not appropriate today.’
He added that capturing tax and Social Security contributions from employees working elsewhere for Jersey companies needed to be looked at.
‘There’s something that needs to be considered. It’s a trend. It’s a direction of travel that we must be aware of and keep up with,’ he said.
The Deputy would not comment on whether the Island’s zero-ten corporate tax regime, under which many Jersey-based companies pay no tax, could be reformed as a result.
Mr Le Feuvre said the trend was an ‘opportunity’ for Jersey if a framework covering the relevant tax, legal and employment issues could be established to make it work for the Island.
He added: ‘The Jersey finance industry is world-class and is growing exponentially but it doesn’t appear to have enough people in the Island to support this growth.
‘We’ve seen some real success stories, where people from hospitality/retail have taken on trainee roles in the finance sector and have blossomed. We should make sure we give Jersey residents the best opportunity to get these jobs but we also need to recognise that there might not be enough people to sustain the Jersey finance industry.
‘From a population-control perspective, Jersey only has so many work licences it can distribute, so many properties it can build and so much capacity to keep on growing.’
The Island’s housing market has come under increasing strain with demand outstripping supply – sending average prices rocketing and leaving many Islanders contemplating whether they can afford to live in Jersey in the future.
Mr Le Feuvre added: ‘At some point, I think the Island will need to try and service and support the growth in finance through using people remote-working outside the Island. How would that look and work? Mechanically and logistically and for issues like tax and legal, I don’t know.
‘It would need some very clever people to sit around a table and work it out. But if they can, then I think there is real opportunity here for Jersey to sustain that growth by creating a framework which enables people to work and contribute towards the Jersey economy, while not necessarily living there.
‘Wouldn’t it be great if people who have left the Island for personal economic and sustainability reasons but still see the Island as their home could somehow still contribute to it?’
Mr Le Feuvre said that since the pandemic a ‘majority’ of job candidates were demanding remote and flexible working as part of their employment
