MIDDLE earners could be in line for a temporary tax break.
With middle-income families likely to feel the pinch from the ramifications of the global credit crunch, and with the possibility of finance industry job losses hovering on the horizon, moves to put back the ‘20 means 20’ package of Income Tax allowance cuts and raise basic thresholds have been made.
The proposals would take £5.5 million off tax bills in 2010. ‘20% means 20%’ is a phased package of Income Tax allowance cuts that has been set up to raise £20m over five years by cutting back the allowances that Islanders can claim off their annual tax bill.
It is part of the package of measures — including GST and Itis — aimed to recover the money lost by changes to the corporate tax system. According to uprated surveys, the middle 60% of households earn between £20,000 and £71,000 per year, which gives an indication about middle-income levels. The moves have been lodged as amendments to the Budget — which sets out how Islanders will be taxed next year — and have been made by Senator-elect Sarah Ferguson and Deputy James Reed.
Article posted on 19th November, 2008 - 3.00pm
21 Article Comments
What about the low earners? Surely people earning under £20,000 p.a. need even more help than those raking in £71,000.
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its to late guys….hello you’ve already done it for his year and the next, the effect will already have taken place!
Horses, gates, bolted….get the idea?
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Common sense Bruce; need I say more?
What is disturbing is that anybody could see fit to tender such a press release.
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I agree with the low earners comment but finally something to help most of the population who are also struggling!!
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It’s the middle earners who are paying all the income tax to help keep the Health and Education services running. They are also the ones spending in the shops helping the economy not to slow. Jersey needs to keep them here and spending affordably. Middle earners very rarely get breaks – it’s normally the other 2 extremes that get looked after. No one should suffer hardship but helping out middle earners will ironically filter to the less well off by contributing to their benefits/subsidies whilst still being able to spend thus keeping low earners in their jobs by buying their employers produce.
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And the rich folk can continue with there tax breaks and dodges whoopee dont you just love the Jersey way.
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I agree with Richard – did they not think that this MIGHT be a problem when they were planning it ??
Oh *I* know … let’s whack 3% on EVERYTHING the people buy so they’re paying extra for the things they purchase at the moment, bread, milk … and then let’s effectively simultaneously reduce their tax allowances so they pay more from their income that way as well … all to support our decision to ease up on the taxation of businesses.
… and ooh yeah ! That’s a good idea too – let’s ask if it’s ok for us to have a 2.5% payrise because we’re all working so hard.
Yes I would imagine sitting in meetings all day planning how next to gutkick the population MUST take it out of you …
How any politician can look surprised for a SECOND when they are viewed with a completelack of enthusiasm for their collective decisions of late is quite beyond me.
They are supposed to represent the populace of Jersey – even when we scream at them that we don’t want to pay yet more taxes they ignore us … so I agree with Richard – too little, too late.
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I agree with puzzled, if the island keeps squeezing the blood out of all of us there will be no Jersey left (or certainly no people living here) who can afford to keep TRYING to live at this cost increase rate (well who would want to really).
Take note Jersey politcians do something for the good of the people of Jersey listen to them for a change and mabe you might get the respect of the Islanders!
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Most people who receive a tax cut will be using it to pay off their credit card debt or if they are lucky saving it up in case of redundancy.
Spend it, you must be joking!
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Er… I think you’ll find the 3% was ‘whacked’ on long before anyone knew about the credit crunch. May be those making the decisions should be using Puzzled’s crystal ball.
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you are better off single as two ‘average’ wages of 30k for a husband and wife make you a middle income earner of 60k and the married allowance does not really make up for it
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About bloody time we got something back – all those households earning less than £20k per year already get a load of help. They get GST reinbursed, income support, free doctors trips, cheap housing subsidised by the states – but those earning a little more than £20k get nothing!
We are the ones paying for the people who don’t have jobs or can’t work. Why don’t you tax the rich people more than 20% and give us middle earners a break?
As a couple who earn £36,000 per annum collectively we have £300 a month disposable income between us – and we get charged 17% tax each! We have no children (because we believe that you shouldn’t have children if you can’t afford them) and we have never been in debt and have never claimed off social security. We are not entitled to cheaper housing because we earn over the threshold but £300 for two people to live off per month after paying the bills is only just doable (now they have implemented GST)
Funny how those “low income” families are the ones spending money in the pub or on takeaway food while us (the people who are supporting them by paying taxes and social security) are getting shafted by GST and can barely make ends meet due to rents being extortionate.
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Those on 20k or less get plenty of help as it is. Income support, child care, cheap social housing, free education for their illegitimate offspring etc, leaving plenty of spare cash for those all important must haves such as a plasma TV and new X Box for little Jonny. Meanwhile those on a higher salary who pay more tax to support those who don’t want to work and who maybe send their children to private school (thus saving Jersey more money) are penalised unfairly. Bring on the middle earner tax breaks!
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Those on a higher salary might be able to pay to avoid tax though.
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I’ve a great idea! Let’s scrap tax and have a mini Fort Vegas and Waterfront casino complex draw thousands of visitors back to the island create hundreds of jobs and the government can take a rake off the top which will replace the tax system.
Just like Monaco and Vegas
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There are plenty of nice little tax shelters for the well off middle earner on say £50K+.
A buy to let flat is a nice addition to the old self administered pension portfolio and shares have given some lovely returns over the last few years.
The dividends are taxed but any appreciation in value is not taxed as capital gains.
Some have blown their cash on cars, jetskis and holidays as soon as they got their mitts on it but there are quite a few that have a good pile salted away.
Having children outside marriage is not the sole prerogative of the less well off. Do you really think sending them to private school makes it better?
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Chris, if you know of a way please tell me. I am lucky enough to be earning more than 20k a year. However I am getting crucified with ITIS and GST.
Still, could be worse. Try living in the UK with higher banding rates and stealth tax everywhere.
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C Gull – I completely agree!!
That recent news story is an absolute joke. I wish i could afford to buy some expensive presents for my family this christmas! I’m going to have to spend my christmas money on electricity heating my house because my landlord is too stingy to put the heating on!
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Pip – I never said that rearing hordes of illegitimates is the sole prerogative of the financially challenged or that sending them to private school makes anything better. My point was that the middle earners who pay to support those unwilling or unable to provide for themselves are themselves penalised unfairly for their actions. Sending a child to private school lessens the taxable burden to the general public and the payee is not compensated for this in any way.
It’s the “take take” attitude, akin the African nations, that the lower earners tend to display which leaves a bitter taste in the mouth of the middle earner.
As to your dictum of tax shelters for middle earners of 50 grand – I would like to see someone earning that amount in Jersey who can hold their hand up to admit to also having a buy to let flat and a worthwhile stock portfolio and be able to afford their rent / mortgage.
Maybe on planet Pip, but not here!
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If you have a look round I think you will find there are a good few in the 50+ year old bracket who do have some worthwhile investments.
Most of them bought their house a couple of decades ago so they got it relatively cheap eg a lot less than £500,000.
They have avoided divorce, always a horribly expensive affair, eschewed battery recharging trips to the Seychelles, car changes every few years etc and generally live within their means.
Although I must admit I do know a senior manager that has earned far more than that for some years and is effectively penniless, but one the other hand they have ‘lived’.
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Pip- just to put things in to perspective-when we bought our house in Jersey yes-of course it was a lot less than £500,000 as it was many years ago.But I remember opening the letter informing us of our brand new mortgage payment which was £256.75 a month and I nearly cried.It was double what we had been paying in rent and I was petrified that we wouldn’t be able to meet the payments when I finally saw it all in black and white.We had two small children and everything went in to paying for our home.We managed with a second hand car and Christmas was always fabulous but without televisions and expensive knick-knacks for our children.So nothing really changes in Jersey-middle earners-which we were-have never had it easy.Of our two children one remains in Jersey and has excellent prospects but the other stayed in the UK following university and could never afford to return to Jersey even though she would possibly like to and has professional qualifications.As I have said in other comments on this website-we left Jersey for good in 2006.Absolutely no regrets!
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