23 September 2011
The 2012 Budget, published today, includes a number of proposals that will provide tax relief to households in Jersey, with a particular focus on supporting families.
It also confirms that savings targets are on track, and outlines plans for further savings and plans to stimulate economic growth. Also notably this year, the Budget includes no major tax increases, with the exception of some minor increases on certain impôts. Tax on fuel will not be increased.
In addition, personal income tax exemptions are being raised by 4.5%. This matches the rate of inflation and exceeds the increase in average earnings (2.5%) by 2%.
The Treasury and Resources Minister, Senator Philip Ozouf, said: "This budget shows our commitment to the difficult decisions made in last year’s Budget which are now starting to bear fruit. We are on track to meet our savings target, to close the £100 million deficit and to balance our budget by 2013. We are in a strong position.
We are, however, conscious that many families have been feeling the pinch. With that in mind, this Budget proposes to almost double the child care relief for younger children. This is the biggest targeted improvement in taxation for families with young children that the Island has ever had. It puts money back in people’s pockets, without adding any administrative inefficiency or costs."
Nursing Director, Rose Naylor, has welcomed this proposal and said: "The cost of childcare has had a big impact on our capacity to recruit and retain nursing staff, because of the significant proportion of nurses’ income required for childcare. This proposal is a really positive step forward for us in our continued efforts to ensure we are able to market Jersey as an attractive place for nurses to work and live."
The proposals in the Draft 2012 Budget include: -
- tax exemption thresholds will increase in line with inflation of 4.5% to ensure people on low incomes remain outside the tax net. This is a positive benefit for most households and leaves an extra £7 million in people’s pockets. This will also help stimulate the local economy
- tax allowances for those within 20 means 20 will be maintained
- childcare relief will be extended to include States nurseries. The tax relief will also increase for childcare costs for children up to the time they are eligible for States-provided early years education from £6,150 to £12,000 per year. This proposal follows a recent report which found the cost of childcare for those under 3 is significantly higher than for older children. This is a further benefit of £1 million targeted especially at families with young children
- income tax relief on pension contributions will be restricted for those earning more than £150,000. This measure is another step towards 20 means 20 for higher earners
- ISE fees paid by banks will be increased by two thirds from £30,000 to £50,000 per year to match the GST increase and to meet the commitment given in the 2011 Budget
- there is no increase proposed on fuel duty
- it is proposed to increase tobacco duty by 10% (35p on a packet of 20 cigarettes) and alcohol duty by 5% (50p on a bottle of spirits, 6p on a bottle of wine and 1p per pint of beer or cider)
- Vehicle Emissions Duty rates will be increased by 5%
- a cap of £50,000 will be imposed on tax free termination payments, thereby reducing the tax free amount of payments received on termination of employment, affecting primarily high earners
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