GST security payments (FOI)

Request

The Comptroller of Taxes is entitled, under the Goods and Services Tax (Jersey) Law 2007, to require a taxable person to give security, or further security, of such amount and in such manner as the Comptroller determines, for the payment of any GST that is or may become due from the person.

What methodology does the Comptroller of Taxes use to calculate the amount of security that a person is required to give in any particular situation?

Response

Article 46 of the Goods and Services Tax (Jersey) Law 2007 is set out in its entirety below.

Security for payment and evidence for input tax

(1) The Comptroller may, if the Comptroller thinks it necessary for the protection of GST revenue, by direction require, as a condition of allowing or paying any GST credit, the giving of such security for the amount of the GST credit as appears appropriate to the Comptroller. 

(2) The Comptroller may, if the Comptroller thinks it necessary for the protection of GST revenue, by direction require a taxable person, as a condition of the person’s supplying goods or services under a taxable supply, to give security, or further security, of such amount and in such manner as the Comptroller determines, for the payment of any GST that is or may become due from the person.

As can be seen from the wording of the article, a requirement to provide security would only be used if the Comptroller believes it is necessary for the protection of GST revenue. There is no set methodology to calculate the amount of security or the time period the security will be held.  Each instance is treated independently, based upon the trading activity and prior Tax and GST history of the registering entity and/or the Tax and GST history of the Director(s).