Treasury and Resources
Ministerial Decision Report
Contingency Funding to increase the Capacity and Capability of the Tax Policy Unit in light of additional commitments made in 2018 Budget
- Purpose of Report
To enable the Minister for Treasury and Resources to approve:
- the transfer of £200,000 in 2018 and £201,000 in 2019 from Central Contingencies to the Treasury and Resources Department revenue head of expenditure for the Taxes Office to increase the Capacity and Capability of the Tax Policy Unit in light of additional commitments made in 2018 Budget; and
- an increase of 2.0 FTE within the Treasury and Resources Taxes Office for the period to 31st December 2020.
- Background
During the debate on the Budget 2018 the States Assembly agreed the following:
- To review in 2018 the case for reducing tobacco duty-free allowances in Budget 2019 and with effect from 1 January 2019.
- To review in 2018 the case for extending the scope of income tax to Class 1 bookmakers in Budget 2019 and from the 2019 year of assessment.
- To review in 2018 the case for extending the scope of income tax to “large liquor vendors” in Budget 2019 and from the year of assessment 2019.
- To engage with – and raise awareness among – UK online retailers that VAT is not chargeable on supplies to Jersey; and to seek to secure voluntary payment of GST where appropriate. We are committed to report progress by 10 April 2018.
- To review the case for extending the scope of GST to digital services imported into Jersey (Sky TV, Apply Music, Spotify and so on) and, if feasible, to bring legislation forward no later than Budget 2020. At the same time to raise awareness that VAT should not be charged on imported digital supplies.
- To review the case for extending income tax to mutual trading and bring proposals forward in Budget 2020 and, if appropriate, for legislation to be effective for the 2020 year of assessment.
In practice, all of these commitments need contingency funding given the existing high-priority policy reviews under way (for example into personal taxation and economic substance as well as the implementation of the new Large Corporate Retailers Tax); the weight of international taxes commitments; and the stage of development of the revenue transformation programme.
Estimated additional costs, which cannot be met from within existing resources, are as follows:
| 2018 (Contingency Funding) | 2019 (Contingency Funding) | 2020 (Growth Bid) |
| | | |
Paybill | £110,000 | £166,000 | £166,000 |
Additional FTE | 2 FTE | 2 FTE | 2 FTE |
Cash Costs – Research & Marketing | £20,000 | £20,000 | £20,000 |
Cash Costs – Travel and subsistence | £30,000 | £15,000 | £15,000 |
Cash Costs – Accommodation/IT requirements | £40,000 | | |
Non-Paybill Total | £90,000 | £35,000 | £35,000 |
TOTAL | £200,000 | £201,000 | £201,000 |
- Recommendation
The Treasury and Resources Minister is recommended to approve:
- the transfer of £200,000 in 2018 and £201,000 in 2019 from Central Contingencies to the Treasury and Resources Department revenue head of expenditure for the Taxes Office to increase the Capacity and Capability of the Tax Policy Unit in light of additional commitments made in 2018 Budget; and
- an increase of 2.0 FTE within the Treasury and Resources Taxes Office for the period to 31st December 2020.
- Reason for Decision
Article 17(2) of the Public Finances (Jersey) Law 2005 states that the Minister for Treasury and Resources is authorised to approve the transfer from contingency expenditure or the insurance fund of amounts not exceeding, in total, the amount available for contingency expenditure in a financial year.
The current Contingency Allocation Policy (published as R.110/2017) sets the requirement for all allocations from Contingency over £100,000 to be considered by the Council of Ministers prior to submission to the Minister for approval. The Council of Ministers approved this allocation at its meeting of 28th March 2018.
To comply with P67/1999 which charges the Minister for Treasury and Resources to regulate the number of persons that may be employed by the States.
- Resource Implications
The Treasury and Resources revenue head of expenditure to increase by up to £200,000 in 2018 and up to £201,000 in 2019. This decision does not change the total amount of expenditure approved by the States in the Medium Term Financial Plan 2016 to 2019.
The £401,000 in total is proposed to be drawn down in 2018 and 2019 but the amount for each year may be varied without exceeding the total amount for the two years
A temporary increase of 2 FTE in Treasury and Resources (Taxes Office), for the period to 31st December 2020.
The Council of Ministers noted that the increase in cost for 2020 would be included in a separate growth bid for 2020 onwards.
Report author : Head of Decision Support | Document date : 6th April 2018 |
Quality Assurance / Review : Director of Financial Planning and Performance | File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2018-0052 - C17 Contingency Funding for Tax New Policy Work £401k |
MD sponsor : Director of Financial Planning and Performance |