Payments refundable to tax payers (FOI)

Request

What is the current number of overpayments refundable to Jersey taxpayers currently being held by the GoJ and the Jersey Tax Department and how are people notified of their due refund/rebate?

Response

Current number of overpayments

Data held shows that, as of 23 August 2022, around 4,750 personal taxpayers had a total income tax credit balance.  These would, where possible, be routinely rolled into the next calculation of the Effective Rate under the Income Tax Instalment Scheme, reducing future monthly tax deductions from salary.  The number of overpayments and underpayments on Revenue Jersey’s ledgers at any point will vary dependent upon the state of each taxpayer’s account.

(“Personal taxpayers” includes single individuals, married couples, and those in civil partnerships. In this context, “income tax” also includes long term care (LTC) contributions.)

The Income Tax Instalment System (ITIS) is a “blunt instrument” – and can be less precise, for example, than the UK’s PAYE system (which still generates large numbers of credit and debit balances annually). This is due to a number of factors, including the degree of volatility arising when people’s circumstances change – essentially changes in income, marriage, or numbers of children) all of which affect marginal relief calculations. 

ITIS Effective Rates are unable to respond in real-time to fluctuating incomes and life events, although taxpayers whose circumstances change are encouraged to contact Revenue Jersey as soon as possible. A dedicated online form is available for this purpose:

Personal Tax Enquiry - Request - Data protection - one.gov.je

Other factors that may generate underpayments or overpayments include:

• Taxpayers deliberately creating overpayments with the intention of offsetting them in future against the frozen 2019 Prior Year Basis liability.
• The way so-called “married-people’s taxation” operates (the move to Independent Taxation is now underway); and
• The number of domestic and / or worldwide income streams that taxpayers have.

For taxpayers with simple tax affairs (e.g., one income from a Jersey employer, no investment income, and no changes of circumstances in-year), the calculation of the ITIS Effective Rate is geared to prevent tax shortfalls arising and accumulating by rounding up the ITIS Effective Rate to the next whole number per-centage point.  This also keeps ITIS simpler for employers to administer and clearer for employees to understand and is in line with international best practice.  

How taxpayers are notified

In most cases, taxpayers will receive Effective Rate Notices at least twice annually.  Taxpayers will also be notified in their annual tax assessment of the total assessment and the balance which they are required to pay. If there is not an outstanding amount to pay, they are told any balance will be included in their ITIS Effective Rate calculation. If a taxpayer wishes to receive a repayment, this can be arranged by Revenue Jersey.  

Revenue Jersey recognises its tax accounting procedures can seem complicated and does provide telephone and online enquiry services to help taxpayers.  

Revenue Jersey is working to provide a taxpayer online account (alongside existing options) in future, which will help increase accessibility and transparency for those with online access.