Deadline looms for ‘prior year’ tax liabilities of thousands of Islanders

ALMOST 24,000 Islanders have been sent letters this week spelling out their liability for “prior year basis” tax, with a total sum of just under £280 million being outstanding.

Correspondence confirming the change has been issued in the build-up to a 30 September deadline for taxpayers to confirm how they wish to settle the amounts in question.

The issue arose from changes to the tax system during the Covid-19 pandemic, when ministers took action to simplify the tax system by completing the switch to taxing current-year income, having previously used a prior-year approach.

This left the tax liability for some Islanders – an estimated 45,000 at the time – frozen while details of repayment options were finalised.

The government has moved to reassure taxpayers about the time they have to settle what is owed, while one influential observer and former States Member has hailed the role of the JEP in reducing the impact of the move for Islanders.

In a statement, the Treasury Department said: “We have previously notified affected Islanders of their liability and their options to pay – we wrote to them again recently to remind them that they should choose their preferred option by 30 September this year.”

The available options are:

• Settling the bill via an interest-free payment plan of instalments for up to 17 years, starting in January 2027, with the final payment due – for those taking the maximum time – by December 2043.

• Waiting to pay the full amount on reaching States Pension age.

• Paying in full now.

The 17-year instalment plan will be the default option for those who fail to respond and opt for one of the alternative routes by 30 September.

The department added: “We have set up a dedicated support team for those affected by this issue – Islanders who have any questions or concerns should call 440300 and select option 2 for personal tax, then option 4 for the prior year basis team.”

Alternative ways of seeking help include visiting the government office at Union Street or filling in an online query form on the gov.je site.

Political commentator Ben Shenton, who was formerly a Senator and more recently served as chair of Age Concern, praised the JEP’s role in highlighting the issue and helping ensure a change in approach by the government over repayment.

As part of a column to be published in Monday’s edition, he wrote: “The JEP did not create the issue, but it amplified it, and amplification matters – one constituent writing to a politician can be ignored, but 10,000 people reading the same argument in their local newspaper becomes much harder to dismiss.

“Eventually common sense prevailed and the result is the arrangement we see today – as a result, thousands of Islanders have benefited, and many now face manageable repayments instead of impossible demands.”