Credit crunch: No relief on the tax front
Wednesday 4th February 2009, 2:59PM GMT.
CUTBACKS in tax allowances are unlikely to be suspended to help Islanders cope with the credit crunch.
Treasury Minister Philip Ozouf (pictured) told the States yesterday that suspending the ‘20% means 20%’ tax package would not be a great help to Islanders struggling financially.
On the campaign trail at the end of last year Senator Ozouf said several times that he would consider delaying the ‘20% means 20%’ package if he got the Treasury Minister job.
But yesterday he said that although he was still going to seek the advice of the Fiscal Policy Panel – three economists who advise on tax and spending policy – a delay was unlikely.
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Hollow promises Minister, hollow promises.
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Why would he do anything to help we aren’t in a recession yet!!!
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I don’t know about anyone else but it would certainly help me to retain my tax allowances and in particular the mortgage relief! I’d like to know why Senator Ozouf doesn’t believe it would help us – he can obviously afford all the extra tax – unlike the rest of us!
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The banks mess up our global economy and the public pays to bail them out. The banks overheat our local economy and we pay extra taxes to keep them here. The politicians make promises to get elected but we still end up paying once they get their power back. When do we get our pay-back?
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This is a disgrace and a perfect example of campaign propaganda. How can in not help islanders to delay it, I suppose an explanation would be too much.
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I would say that action to put more money into the Jersey economy is vital unless the Minister is prepared to see a lot of small businesses going bust with the consequent job losses.
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lies lies and more lies to get elected, once sitting behind the desk do what one wants!!!!!
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Nellie, people that have bought a house have known for sometime that the mortgage interest would be tapered out. Forewarned and forearmed as they say, so if people really need an extra year, then their budgets must be on a shoe string.
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Maybe a law should be introduced to ensure the elected politicians carry out the promises they were duly elected for……or lose their position!!!
Can’t this be classed as a verbal contract in the same way people make verbal transactions.
If we elect people on the basis of their promises and they fail to deliver then it would be a breach of contract…..after all they are employed by us, the taxpayer. There should be terms & conditions as with any employer/employee.
….oh for a perfect world!!!
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Once again our ministers endorse the fact that they lack vision and how Ozouf got his position I will never now. Heres my vision when 2011 arrives I think you will find that people and not just finance professionals will be making an exit from this island. I know of at least a dozen people who are making plans for 2010. The 20% means 20% and GST is a disaster for middle income earners who are baring the brunt of this taxation and are being squeezed out of the island. Looks like you may lose more tax revenue than you thought Mr Ozouf! What a shame.
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any drop in my tax would help me and others.
i dont know where i am from one year to the next, with yoyo wages. as i do not want to find that i am short at the end of year.
itis is as clear as mud to me.
i dont think that i am alone on this one. taxing our food is a disagrace.
how will the unemployed pay the still a year behind pay their tax bill?
why did we not have a proper p.a.y.e?
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I am not surprised one little bit. When are this government actually going to do something to help islanders out ?
A peoples government …NOT! Do they think we are all millionaires ?
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Surprise surprise, someone who works for the states and made false promises to get in. What a joke – and can you please explain how people wouldnt find tax cuts a help, I know I would – especially when the tax office cant seem to work out a suitable rate and my rate has increased from 7% to 19% this year…..JOKE!
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They are quite happy to top up the income of the multi millionaires by way of the rent rebate scheme however. This benefit has the added result of keeping property prices and rents high.
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I am going to run for the states next year, i will promise free cars to all, free houses to all, free money – no tax, 2 flakes in every ice cream….
But when I get in i am actually going to put tax up to 50% becasue you hard working citizens have it too easy!!!!
Empty promises Ozouf
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A tax drop would most certainly help me, no question of that. Promises, promises, all empty and shallow. When will we ever learn? ITIS is a nonsens which very few people can get their heads around. Why oh why did we not have a straightforward PAYE system? I suspect even the Tax Office do not know what they are doing.
On the matter of promises Mr Ozouf, I recall at a meeting last year of the Landsbanki depositors group, you mentioned that a DPS was to be put in force in the near future. How near? or has this died a death as well?
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JTM – people who have bought a house were aware of this were they, so if I bought my house 10 years ago I was aware that mortgage relief was going to be cut was I?
Let me know where you got your crystal ball from will you so I might know well in adavnce of anything that may affect me in ten years’ time.
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I look forward to the next time you run for election Mr Ozouf. I very much doubt the people of Jersey will believe anything that you say….
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Well well no surprise here once again those of us who work hard and get no help from the state will be hit yet again. I was sad to see that Social security rates at the maximum increased by above cost of living again this year as well. Still I supopose some one has to fund all the excesive states spending and above the cost of living pay increases for civil servants.
One day we will get some politicians will enough courage to tackle excessive states expenditure, but not in my lifetime I think!
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JTM-many of us who took out mortgages several years ago did this under the old tax allowances and just about scrape by each month – it’s not just another year’s mortgage relief we need – it’s not losing the mortgage relief at all! It’s no use saying we’ve had time to sort this out – we arranged our finances under the old tax situation and it’s the tax department that’s changed the goalposts not us! The only thing that’s saving a lot of people at the moment is the low interest rates. People like Philip Ozouf have no comprehension whatsoever of the precariousness of many people’s mortgage funding.
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At the time of the elections every single candidate who answered, bar one, stated that there should be tax relief on mortgages.
And how many have stood by this since being elected.
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I am at the lower end of the middle earners and work in a bank. We have just had our payrises for the year which are less than 1%, which is not going to go far towards food (up 13%) and electricity (up 25%). If they cut the mortgage interest relief I have private pensions and private healthcare so would say that I am not a drain on the states in any way I am going to have to sell my house to pay my tax bill.
I don’t think I am a drain on society in any way as I have private healthcare and pensions etc.
And when I have to sell my house to pay my tax bill are the States going to put me up in one of the nice new houses they are building? I don’t think so!
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Cutting interest relief on my mortgage means that there is a very real possibiltiy that I have to take my kids out of private education and put them into states schools.
They may make a few £1000′s extra on my tax, but it is now going to cost them far more than that as they will now have to educate my children as I wont be able to afford to.
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direct copy and paste from phils site
Income tax – I would consider deferring elements of the 20 means 20 measures for middle-income families who are facing unprecedented pressures caused by higher food and fuel prices. Personal income tax allowances and thresholds can also be raised if world commodity prices continue to increase the cost of food. The strength of our public finances means that we are in a position to react while others cannot.
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Very clever in his writing, note I would consider and then followed up with Personal income tax allowances and thresholds can be raised.
I would point out the word CAN and not COULD was used by him so if they CAN then sort it out.
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In fairness to him, the picture has changed a lot since October and he does use the word ‘consider’.
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JP, Nellie, the scraping of tax relief on mortgage interest has been talked about and shuffled about for several years now. Everybody knew it would come in eventually and it has been the situation in the UK for sometime anyhow. To say that people have not planned for this is silly really. The writing on the wall has been there for sometime. I have already mentioned that this couple with tighter lending criteria and recession will no doubt now lead to a massive drop of prices.
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Ok JP, well after you have been made a Minister you get a new book of excuses, sorry, rules, a copy of which we have obtained which goes someway to explain the Islands predicaments.
Rule 1 says that the electorate will never remember what you said, and if they do and repeat it of course the media misinterpreted it.
Rule 2 says use the word consider often, it implies concern but really means that a) you haven’t mind your mind up or b) you don’t know how to make your mind up, which of course were requirements of the new job anyway.
Rule 3 says always pretend that we are well off and please don’t let the electorate realise again that we only earn 10% tax income from the finance industry and the rest of that tax is now paid to us by them.
Rule 4 says always talk to babies in pushchairs, they won’t understand but at least you have a captive understanding audience.
Rule 5 says never, never make a decision even if you are tempted to during a Rule 2 moment and never give any money back or reduce anything because your salary, expenses and perks could suffer as a consequence.
So the question again was what JP, or do you get the picture?
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Nellie and Bean for nothing, I completely agree with you. The mortgage relief was factored into my mortgage calculation by all the banks and advisors I went to see, if they scrap it then it is just squeezing the middle earners more and more. Therefore less money to boost the local economy as we are all too worried about keeping a roof over our heads and keeping up with the ever increasing prices of food and heating.
Why don’t all us middle earners, just decide to stop putting the effort in and get the States to support us with housing and benefits- my life would be far less stressful, rather than worrying about how I can afford stuff and where I need to make cutbacks.
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Phil, great response.
Might be an idea you have a rule 6 stating you must remove anything you mentioned during elections from your website, dont just assume no one will read it. Or does that fall under the remit of rule 1.
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How can these homeowners whinge about the dropping of tax relief on mortgages, for those who rent there is no allowances whatsoever, when some of these house owners who sell on their property i have not heard any of them moan about the vast profits they have made on the resale, which has seen almost a 60% growth on the value of property in the last 6 years, but beware i would not be surprised that the chief minister will be fetching a capital gains law on property in the next few years to pay for the wages of incompetent states members and vast salaries of the chief civil servants who seem immune to blame when projects go well over budget
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The reason we had mortgage relief was to encourage people to buy there own houses and become less of burden on society. It means you have a very expensive asset fixed to the ground. If you don’t pay your taxes, are fined by the courts, or run up excessive bills your creditors have some recourse to get their money back. It means you will be less likely to jump on the morning boat or plane. why should you not get some tax relief for that millstone.
Others may complain about the high cost of rented accommodation but they do have the aforementioned morning options.
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I took out my mortgage 9 years ago – there was never any mention of scrapping mortgage relief at that time and not for many years after that. I apologise for not being clairvoyant in my financial planning.
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All these electorates/state members don’t live or work in the real world!!
They are all Jersey families who own/have inherited land/buildings…i can name a number of them!
They don’t struggle on a day to day basis like the average joe…so how can they possibly make such important decisions based on their fortunate situations, which let’s face it, that’s what they do!
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Mortgage relief is not being removed if you are on the marginal rate of taxation, which will affect the vast majority of people with mortgages. If you are not on this relief, then you either have a large salary, or low interest payments on your mortgage. If it is low interest payments, the removal of mortgage relief will be small. Nellie, have you actually checked whether your mortgage interest relief is affected by 20:20, or are you reading the headlines about mortgage relief being removed without reading the detail?
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I am in the very fortunate position of being able to stay at home for a few years to raise my young son. When ‘they’ started talking about 20 means 20, I rang Income Tax and asked ‘will I have to go back to work to pay my husband’s tax bill?’. I was assured it would only make, I quote ‘a few hundred pounds difference’ to our tax bill. The reality is quite different – £1000 increase per year whilst they phase out reliefs and this year, the added sting of no payrise for my husband.
As with many others, our financial adviser also took into account tax relief. Any profit in our property is merely paper profit, unless we leave the Island (it is my home, all my family are here). I often wonder what Jersey be like when my son is grow and now there is talk of 100,000 population. I despair.
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Jersey is a great place to live and with regards to the cost of living here, it’s a bit ‘swings and roundabouts’. I have always accepted the high costs associated with living in a beautiful environment. Food, eating out, shopping etc. Also the costs of getting on and off the rock. To go and see a football/rugby match or a show, I have to stick a few hundred quid on the price of a ticket for the plane fare and a night in a hotel. When I go on holiday, again, another couple of hundred quid for the domestic flight and night in a hotel.
Of course the biggest cost was the price of property. 4 bedroom modest house in excess of £700,000.
But that was part and parcel and it was easy to accept those extra costs as the benefits outweighed the downfalls of living on a rock. Slightly higher wages and I could get tax relief on my mortgage. It all balanced it self out in the end.
Now, with the introduction of 20 means 20, my tax bill has increased by several £1000′s a year and the other costs are still increasing.
As for homeowners making huge profits on selling property, that may be the case with some who are in a position to buy and sell many properties as investment. I bought my house to use as my home, some security for my future and for an investment so my children have something for their future.
I also take pride that my home is my own and I have worked damn hard to get it as well as making many sacrifices. By buying my own house, paying for private health care and putting my kids through private education, I am wondering just how much money I have saved this island.
Once again the hard working amongst us who have never asked for a penny, but strive to provide for ourselves and our children are penalized for doing so and critised by some for making something of our lives.
In a society where dependency on the government for the fundamental basics in life seems to be so prevalent these days, I would have thought some reward for those who save and contribute rather than cost would not be too much to ask for.
I make no apologies for having a whinge. I have earned that right!
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Tax relief on rates of under 3% is not the real crutch for the middle earners but education is.
In the UK everybody aged 18 or over is an adult and is treated as an adult; not in Jersey.
1) Man, woman, partner or kept woman should be treated as individuals and taxed as such. But not in Jersey.
2) Marriage should be encouraged by allowing the pooling of relief. To radical for some but it will come.
3) Children and teens finish state funded education at 18 and pay their own way through university. No surprise here as Jersey has followed the UK.
4) To encourage and foster an educated workforce for future is lauded by all; for the UK offers student loans to be replayed from earning. But not in Jersey.
When will the Council of Ministers wake up to the fact that they are running an antiquated machine in need of a good overhaul?
Treasury Minister Philip Ozouf believes he has a future as a politician, but not if he treats his electorate as a buch of schoolboys with a lot of pocket money.
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