Plan to attract more tax exiles
Monday 17th January 2011, 3:00PM GMT.
Treasury Minister Philip Ozouf
DOZENS of super-rich immigrants are to be lured to Jersey with the promise of lower taxes under plans being drawn up by the Treasury.
Senator Philip Ozouf is hoping to attract 15 tax exiles to Island shores a year by lowering the amount they have to pay on their worldwide income.
However, in return for the more generous tax rates, they would be required to pay at least £125,000 in income tax a year and 20 per cent on their Jersey income.
It is hoped that the lower rates will increase the cash coming into Island coffers, because more 1(1)ks would be bringing more of their money to be managed in Jersey – thus creating jobs and other indirect sources of income.
• Full report in today’s JEP
Read the full story in the Jersey Evening Post. Click here for subscription details. Individual editions are also available online.
The Queen's Diamond Jubilee
JEP Jubilee Editions
Saturday 2 June: Guide to Celebrations
Wednesday 6 June: Souvenir of Events
View The Queen in Jersey supplement
Travel
To, from and around the Island
Airport Arrivals/Departures
Harbours Arrivals/Departures
Bus Information/Timetables
This is Jersey
Jersey Evening Post
Useful links
Or perhaps re-negotiate with the current 1(1)k’s . . . .
Report abuse
Sounds like a fair deal to me.
Report abuse
Now watch the usual suspects (or are they the same person), a la Pip/Truthseeker/Adrian all whine about how bad an idea this is.
It is abotu time, as then they have the added benefit of havign their tax affairs managed locally, rather than perhaps through Guernsey.
Well done – Ozouf will be the best choice for CM.
Report abuse
It’s nonsense
Report abuse
How is this going to work? 1.1ks are 1.1ks for a reason, because they can hide money, also if they open a company in the island they don’t pay tax under the currently (illegal) zero 10.
Report abuse
What? I cannot believe it yet more people coming to the island just because they are rich with no links to the island. I cannot work in Europe because of a stamp in my island.
Get real Mr Ozouf start taxing some of the UK companies over here instead of importing more people to push up prices of houses etc. I may just leave the island like many ordinary Jersey folks and leave it for the Rich
Report abuse
surely they would not bring their wealth to jersey as income from it would be taxed at 20% whereas no jersey income has a marginal tax rate on nil.
Report abuse
I think Mr Ozouf is running out of ideas..time to move on!
Report abuse
125k is chicken feed to those targeted….will we welcome arms dealers and mercenaries still…..?
Report abuse
Hooray – at last!
Lets bring in lots of independently wealthy people who have NO drawn on our economy. NO social security or health care, NO pension.
They can buy expensive houses, do them up, eat out, fly their friends in, use taxis – its all good.
Just make sure you get the correct tax for the Island and its WIN WIN….
Report abuse
It seems that our future Chief Minister is stuck in a time warp and cutting an increasingly Neroesque figure.
Back in the Sixties and Seventies Jersey was OK for tax exiles. It was like a dull bit of the Home Counties with a slight French twist and it attracted the Charlie Hungerford type of tax avoider with a few tens of millions in the building society.
Today we have trusts and all sorts of sophisticated offshore tax shelters, the super rich can live just outside London on a huge estate with all the amusement that offers. Why stick yourself in a tiny little house costing £3million on a small rock in the English Channel that has only a few half decent restaurants, newspapers regulary do not turn up due to fog, the Internet barely works, etc, etc?
Besides with Pip Ozouf and his mates burning the tax payer’s cash at over £10 million a week it would take dozens of them to make even a pinprick.
Report abuse
Does this mean, we the general public will have to cough up more for housing and taxes-because they won’t be paying any tax!!
This island really hase’nt thought this through.When are we going to CUT THIS HUGE CIVIL SERVICE PERSONNEL……………………..WE DON’T NEED ALL THESE PEOPLE!!!
Report abuse
No, 20 means 20 for us all!
Report abuse
Trickle down economics, just when the world left this behind them along comes Oz with more kindergarten economics. For all of the above read, I would like to help my rich friends and not middle Jersey.
Report abuse
What a stupid headline JEP
Does the JEP hate Jersey?
If people want to move here because they are being ripped off elsewhere then good for them. Here is a less left wing socialist headline you could have used:
Jersey aims to attracted more wealthy residents
or
Jersey looks to welcome more job creators
Report abuse
I am assuming this offer will also open to those who already live in Jersey or it would discriminate and then be considered bad by Europe.
so is this a tax break for the super rich, dressed up as of benefit to us all ?
Report abuse
Hey, I’ve always wanted to be invisible. Looks like most of us are to the States.
Report abuse
Oi Ozouf 20% means 20% thats across the board not just for the have nots
Report abuse
3. Real Truthseeker
Exactly right but Philip Ozouf isn’t quite going far enough yet. I want to see rich people whether or not they are friends of his, having their tax paid by ‘ordinary jersey /incoming residents’.This makes absolute sense as that leaves them with lots of money to spend in Jersey ,with companies that might just have to pay tax here as well.
In fact lets go the whole hog and reinstate a true feudal system where ‘we’ can work (gratefully) for our leaders and betters.
By the way Philip your Machiavellian positioning with Freddie etc is seriously backfiring , so badly that you might need to find a real job after October , with the rest of us!
Report abuse
Nothing but immoral!
Report abuse
why not put the states motto on the flag THE RICH ARE GETTING RICHER WHILE THE POOR STAY POOR!
Report abuse
just goes to show whose side he really is on.
certainly not for the middle or lower classes,just the super rich who will bring no benefits at all to Jersey.
He has really shown us his true colours once again.
Report abuse
Clearly running out of “exclusive” dinner party invitations and trips out on super yachts perhaps?
Report abuse
I see a different picture.
Public sector wage bill, inclusive of S/Sec and pension by employer costs 325 million pounds sterling per annum and rising.
Income to be gained by new raft of 15 super rich who do not earn in Jersey hence no 20% on earned income as they do not earn here or just wish to retire here, therefore 0 from the 15 X 125,000 per head the total tax take is 1,875,000 hardly helpful.
However guess what we can see yep, more property sold at the top of the scale costing several millions per house. so 15 mansions maybe coastal iconic properties at say 2.5 million each ( lets be conservative ) 37.5 million.
Now Senator Ozouf put it by us again, who are to be the real earners out of this little scam ?
Davey West.
Report abuse
How desperate is it getting? Should we all be getting worried? Seriously, are we in the poo poo?
Report abuse
I am paying twenty means twenty as are all my friends and colleagues.
My tax bill has gone up under these reforms but I have reduced my increased liability by shifting investments from income to capital.
Now seriously wealthy people are to be lured to the island by twenty means ten or maybe five for them.
Luckily for Phillip Ozouf he will not be facing election in 2011 so he has a clear run at the post of Chief Minister.
The middle Jersey electorate will boot him out in 2014!
Report abuse
if they pay their tax and the others who are here now , , and do not build a portfolio out of homes fine.
we do not not need any more big fish in the small pond.
Report abuse
Where are all these wealthy people going to live – they won’t want to buy tiny apartments at the waterfront – if 15 1(1)k”s arrive every year with their family where will they find suitable properties?
Report abuse
If you were rich,
would’nt you want the POOR to pay everything for you?
Report abuse
I can’t understand the furore regarding tax breaks for a group of individuals who don’t yet reside here. Even if they paid £1 in tax, that’s £1 extra in income. 1(1)ks pay more tax in total, contribute more in local spend to businesses who in turn pay more tax on higher incomes benefiting EVERYONE. Education, Health, Welfare, everyone wins. The reality is wealthy residents will up sticks to another jurisdiction if pushed. “GOOD” you may cry, but it’s not good for the economy if they go. This may be “unfair” or “immoral” however that is a separate debate. This is a business argument, not a moral one.
Report abuse
Don’t worry folks…The time will come when there are not enough slaves to look after these rich folk. Who will take their poo to Belozane then?
If i were a rich person i would come across buy a property, pay the £125k pa for tax reasons then disappear to another country. Any companies i have would then be registered in Panama just like some of the big boys over here are already. This means i would not pay any tax on the income here! Simples.
So to top it off i have a registered address to fiddle my income and its only cost £125k. The States gain £125K for nothing…..
Report abuse
Lets invite all those tax evaders that are to be named on wikileaks!
Report abuse
Looking through this move its obvious that they intend to keep the top income tax rate at only 20% then when really higher earners should be paying higher rates.
Report abuse
I actually thought this was the policy for the last 20+ years??
I generally think it’s a great idea, extra income tax for the states coffers (depending on how they see fit to then waste it!), the new super rich will bring more money to the economy, they will buy a house, cars, pay bills, employ staff, spend money at shops and restaurants, lots more money will flow into the economy and filter down to the man on the street.
If we had more super rich paying into the coffers, hopefully Senator Ozouf won’t raise GST again and again and no doubt AGAIN after that!!!
Although i think the main criticism is that the states need to stop throwing tax payers money away before you concentrate on bringing more money into the economy!
ie. sort out the yobs on the unfair ridiculous social system (where people are better off not working and claiming benefits than they ever would be working! TOTALLY ABSURD!!!), stop taxing the hard working to the hilt, tax all businesses (including banks) at 20%. They will not leave Jersey and we all will benefit.
The amount of money the States have wasted recently, let alone in the last 20 years shows total incompetence!
Report abuse
Well it’s about time too!
Although, typical Jersey, somewhat missing the boat as usual, apparently Guernsey had close to 30 1(1)K’s last year.
These people don’t cost the island a penny, all they do is contribute and ‘wash’ their money around the economy, employing people, using the restaurants etc. etc.
Every pound they pay into the states coffers is every pound we won’t have to pay, if we don’t get them in, I bet GST will be going up again!
Report abuse
I agree with trying to get more wealthy people onto the Island: it seems insane that a scouser can com here to sell drugs with no problem but a wealthy person has all sorts of hoops to jump through.
But lets have some joined up thinking. We need an open market for houses above £2m, residency permits to stop undesirables coming here (and I know of at least 3 1(1)(k)s who have, since they were granted that status in Jersey, been convicted of criminal offences. Work permits to control population.
Scrap reg of uns and housing, replace it with residency and work permits but also have the vision to realise that the world is changing and we only want people to move here (rich or poor) if they are willing to contribute fairly to a more equal and cohesive society. If reducing their tax bill to the absolute minimum is the priority, Jersey shouldn’t be the place for tax exiles. If living somewhere beautiful and helping to support the economy while paying reduced taxes is the aim, fine.
Report abuse
Just the job for raising Jersey’s image elsewhere (not)
Report abuse
This should be encouraged.
Before the hinance industry arrived, retired indian army officers, retired colonial administrators etc were a significant part of Jersey’s economy.
Unfortunately many locals now have huge chips on their shoulders and resent anyone who is:
1/ rich and/or
2/sucessful and/or
3/not Jersey born
If I was super-rich, I would not touch Jersey with a barge pole.
Report abuse
Mark G (31) Lets invite all those tax evaders that are to be named on wikileaks!
Mark, are you sure that none on wikileaks tax evaders are not already resident here?
Could be fun in the next few weeks. A taste of The Open Society so abhorred by the corrupt in our society.
Report abuse
Pip Clement, again you don’t let facts get in the way of your ignorance. You clearly do not understand how the system works, and for all those who thinks everyone is on a 20% mean 20% it IS NOT the case.
Firstly Pip/Truthseeker – whoever you are, you need to understand the basic principle, these people are NOT a draw on public funds, and this is money the island would not otherwise receive. Win/Win.
Secondly, under the marginal tax calculation method, if you pay a mortgage, if you pay child care, if you pay insurance, you will still get relief. FACT! The phasing out of relief is for standard calculation only, not the marginal calculation, and relief on all this will continue far into the future.
For all those who claqim EVERYONE is on a 20 means 20, you are either ignorant, stupid, or liars.
As a marginal tax payer I am on 14%, and will be for the indefinite future, even though the combined household salary is in three figures.
Report abuse
This is ridiculous.
The State’s current burn rate is about £11m a week. All the current 1(1)K’s pay about £8.5m between them in direct taxation or about 5 days worth of running the island.
So after the 5th of January each year it is good old middle Jersey digging in his or her pocket or purse to fund the island.
We do not pay so much per head but there is a lot of us and we do not get to negotiate our tax rate!
To make much difference we would need several hundred new 1(1)K’s.
Smoke and mirrors and jack up the GST until the pips squeak me hearties!
Report abuse
More of their money managed in Jersey? Doubt it if they have to pay 20 on their Jersey income! They will pay the minimum £125k per year tax and keep the rest elsewhere. Simples!
Report abuse
10 – Pip C, 10 mill a week? Really? As for burning tax payers money, I think that’s exactly what he’s trying to sort out. Problem is that there are people like you who want the States to cut back – but only if it doesn’t affect them personally!
Report abuse
Bella “just goes to show whose side he really is on.
certainly not for the middle or lower classes,just the super rich who will bring no benefits at all to Jersey.
He has really shown us his true colours once again.”
What planet have you been living on? What do you mean the super rich will bring no benefits at all to Jersey? – read the article.
They will bring in decent tax revenues to help boost income, not be a drain on the economy, they’ll pay for their own health care, private schooling, the list could go on. Or would you rather bring in the “poor” who claim as many benefits as they can, need social housing and health care to treat the years of damage that smoking and drinking has done by them spending their benefits on these things (oh and still winge that the poor are getting poorer). Without the rich paying high taxes, where else will the income come from?
You say Ozouf is showing his true colours – yes he is, he is trying to look after Jersey.
Report abuse
Might I make a suggestion to the Minister?
Rather than adopt a strategy of ‘price competitiveness’ – a strategy that might work for Tesco and the large customer base that they have, but is unlikely to be suucessful for us considering the small number of tax evaders – couldn’t Jersey develop a strategy that would serve all of its citizens and promote economic diversity?
For example, we could try to attract people that might actually give a d*mn about the community they move to and are looking to contribute to its success. We could encourage individuals with ‘means’, an innovative business idea and the money to invest to turn it into a reality, to move to Jersey and establish their company here – as a REAL local company – providing non-finance jobs for Jersey residents. They and their company would pay full Jersey taxes. After all, 20% is much better than most jurisdictions.
The advantageous of such a scheme would be numerous. Most notably we would be attracting the sort of people who would likely contribute to, and return something to, the community as opposed to the selfish and greedy ones we seem to be attracting now – givers rather than takers, if you will.
Just a thought
Report abuse
Anyone else noticed the numebr of expensive properties and apartments that aren’t selling in the £1m+ category?
hmm all our states members care about is artifically creating a housing market.. because if that goes phut.. the island goes phut.. and so will all their investments and back handers from the building firms.
Report abuse
Forty years ago it was recognised that attracting wealthy immigrants was beneficial to Jersey. Then for many years Jersey considered itself fit only for super-rich, who had to jump through hoops to be allowed in. Eventually the Isle of Man and Guernsey took over this sector, and Jersey lost out. Jersey needs to depend on finance less, and this is one way to do it. These immigrants will be businesses themselves and they will spawn business activity. It will take time to restore our trashed reputation, but better late than never.
Report abuse
#45 No Axe To Grind: Good points, and very valid and relevant.
Report abuse
Mr Ozouf, as to £125K income tax per annum + 20% on Jersey-source income, this is actually a 25% increase on the previous position. But, contrary to the disingenuous information recently given in the States about paying tax on a sliding scale (although technically correct)the position for new 1(1)(k) residents was that they needed to satisfy the Comptroller of Income Tax that they would have sufficient taxable income to give rise to a tax bill of £100K. They then went off, took advice from their tax accountants and set up structures off Jersey to shelter income so that the tax bill remained at the minimum. Mr Ozouf, just how many new entrants do you think will bring their wealth into Jersey so as to pay a penny over the minimum “entrance fee”? Not many, judging by the present lot! Just when will you give the Jersey tax payers the real truth????
Report abuse
For people with the mentality of RT and co I would be doubling their tax rate to help make up shortfalls caused by both ends of the spectrum.
Well put Pip, 5 measly days, that leaves 360 days for the rest to cover. Why not let the rest pay the 365 days and be done with them? Property prices would fall as the blank cheque book policy would be ended. This would allow those frozen out at present a chance to get their foot on the property ladder.
With this policy I make it that all a rich person has to do is keep all their money invested overseas and hey ho little to no tax. A tax avoiders paradise if ever I saw one.
Jersey needs to encourage people to the island who are willing to pay a decent amount of tax on their income/investments and not a token amount of £125K which is a joke in my opinion.
donald “If reducing their tax bill to the absolute minimum is the priority, Jersey shouldn’t be the place for tax exiles.”
Glad you agree with me, unfortunately this is exactly what the rich use Jersey for. This is what Ozouf and co are encouraging. Large scale tax avoidance should not be tolerated, as it is ethically and morally wrong.
As per employing people how many does a rich person need to employ? Maybe one gardener on minimum wage and a cleaner on minimum wage. These employees may then need a rent subsidy from the tax payer and maybe claim benefits as well. What use is this for the economy as a whole?
Do rich people need to spend much in Jersey, on anything? No they don’t. They have the same access to the likes of Amazon as the rest of the population and I am sure they aren’t going to waste money on buying locally.
Sara I would be encouraging the types who value society as a whole, and who are prepared to pay a reasonable rate. It appears others are quite happy to be encouraging the penny pinchers.
Well done Steve another one with some common sense and not one blinded by the finance is good mentality.
Report abuse
44) eminently sensible and enlightened ideas which would help a wider portion of the islanders as well as the newcomers and diversify our economy to boot. It won’t happen unfortunately because a bit too blue sky and complicated for our politicians and civil servants to master something along those lines. This is Jersey after all.
Report abuse
“10 – Pip C, 10 mill a week? Really? As for burning tax payers money, I think that’s exactly what he’s trying to sort out. Problem is that there are people like you who want the States to cut back – but only if it doesn’t affect them personally!”
I quote from the last budget report on the States website;
“During the debate, the assembly set States spending at £690,200,000 in 2012 and £680,300,000 in 2013. These figures incorporate a minimum of £65 million in savings which, together with the agreed tax rises, are designed to balance States expenditure and income by 2013.”
That works out at a smidge over £13 million a week to run the States, so I am on the low side.
Where it all goes nobody knows as the States accounting is opaque to say the least and they have been criticised for this for decades but it never improves.
But as you do not want to ask questions I guess you have a blind and touching faith in our leaders!
Report abuse
38. Mark
Hi Mark, I for one can not wait for the list to be issued by wikileaks. But as you say are some of them already here? Yes.
Philip Green and co have a registered business in Jersey which handles all the millions made from his empire in the UK but the irony is that all that money is then filtered to Monaco where his wife resides, tax free. Mr Green pays no tax in the UK and then pays no tax in Jersey. The only reason the UK government allow him to do this is because all his employees pay tax and the VAT man gets a large chunk from his sales. They have even given him an advisers job in the UK government!
The problem here is that while it is legal Jersey gains no benefit from these billionaires. The offer by our Treasury Minister will only attract those wanting to avoid tax in their own country, we have not heard the last of the USA and their Presidents feelings on Off-Shore Islands…….The headline above is already circulating around the world and will bring more heat to Jersey.
Report abuse
@42 Sara
‘Or would you rather bring in the “poor” who claim as many benefits as they can, need social housing and health care to treat the years of damage that smoking and drinking has done by them spending their benefits on these things (oh and still winge that the poor are getting poorer).’
What an absolutely disgraceful thing to say. I hope for your sake that you never fall upon hard times, lose your job, suffer a disability or simply grow too old…all reasons why people find themselves slipping to the bottom of the earnings ladder, often taking their families with them for generations to come.
To generalise that all these people ‘spend their benefits on smoking and drinking’ is as offensive as me assuming that you are a Daily Mail reading Christian with a husband in the finance sector.
Totally out of order.
Brucie
Report abuse
#29 Anti-Moan, there is always an administration cost with people moving here, plus the need for more civil servants. They’d have to be paying at least enough tax to cover all that before we can even look at them starting to become a benefit. Of course the assumption is that they will spend lots on the island. What if they don’t? Not all do (except for bare essentials). No doubt some of them got rich by not spending very much at all, anywhere!
Report abuse
#44 Now now. That’s just a silly idea. Such people would be too busy working hard and contributing to the community to want to offer nice backhanders and posh dinners to any of our States’ Members. Such people would actually expect a just system where hard work and honesty pays off. Mind you, plenty of our great States’ Members couldn’t bear to be seen with such ordinary, hard-working people so I guess there’s no loss for them!
Report abuse
44 stevechanyi.je
Well said.
By attracting more tax dodgers here in the present climate is a sure way to make Jersey one of the most hated places on earth.The global newspapers are full of stories of bankers bonuses,companies avoiding tax,protest in Topshops,etc.Tax avoidance is not the flavour of the month.In the not too distant past Jersey was famous as a quaint tourist destination,Bergerac and the Jersey cow.Now its full on extreme (though legal) tax avoidance,putting out the word that we are trying to lure in tax dodgers at a time when many countries are losing tax revenue by companies being registered in Jersey is ludicrous.I wouldn’t be surprised to see boycotts against Jersey in the future.
By all means try to attract new business to the island but not like this.
On a seperate note,are there any other jurisdictions where wealthy immigrants pay less a % of tax than the locals?
Report abuse
Leah, you make a fair point indeed however the minimum income tax requirement of £125,000 per annum is something of a safety net. Many of these additional 1(1)k residents may not spend lots and conserve cash. This assumption of high spend is based upon “likelihood” but a rather strong one. Some will certainly spend high amounts locally. Yes there is an administration cost to anyone moving to Jersey, but what a bonus if they happen to be wealthy. I reject that an additional 15 wealthy individuals per year will cost the island more than an income tax contribution of £125,000 (which is minimum so could be greater), a 20% tax on Jersey earnings and their local spend.
Report abuse
Oh my dear Adrian – you really don’t understand how the system works. Be done with them – great, let’s reduce the revenue to the States, and expect Jersey to be a better place.
The problem with the vocal minority of bloggers on here, it seems they look back at the occupation through rose-tinted glasses, and want to return to such a degrading and terribly poor lifestyle.
Thankfully they are only the vocal minority, who probably aren’t educated enough to know how to vote.
Report abuse
“As per employing people how many does a rich person need to employ? Maybe one gardener on minimum wage and a cleaner on minimum wage. These employees may then need a rent subsidy from the tax payer and maybe claim benefits as well.”
Adrian, you really are clueless. Anyone buying a house at the top end does work on it – extensions, renovations, redecorating. They may employ a nanny, a housekeeper, a gardener, a cleaner. They will certainly eat out 3 or 4 times a week. They will buy fine wine in Jersey, they will keep and insure cars here, possibly boats or planes as well. If they follow the example of many of the wealthy migrants I know, they will also quietly make significant contributions to local charities.
And my gardener, for what its worth, charges more than double the minimum wage. If you’ll do it for minimum wage I’ll employ you
Report abuse
I know of a local company 90% owned by a 11K family member who is actively planning to apply for a Rural Initiative Grant aid in the next two weeks.(45% grant up to £50K)
Report abuse
#56 I thought the point was that the existing ones aren’t paying even the ‘safety net’ amount. Fine to bring in more people, but only if they ARE paying what they agree to pay when they move. If they don’t then they should be kicked out, otherwise the island is just a laughing stock.
Mind you, I don’t think the States worry about things like having pride in the island. They’d sell pride if they thought they could make a buck out of it.
Report abuse
I think it is unfair to call these people tax dodgers when all of us here in the forum pay 20% or less tax.
In many other countries, including places like France it was (and soon will be again) possible to pay over 100% in tax! Imagine that! Most other Tax Havens (Guernsey, IOM, Monaco, Dubai etc) have FAR better tax rates for new comers than us.
People coming to Jersey HAVE to have an income over £625000 a year, they buy a very expensive house and pay stamp duty. They invest in local companies.
The changes to the 1(1)K rules are only sensible. Currently 1(1)Ks are encouraged to invest their money OUTSIDE of Jersey as they will only pay 1% on those incomes, the change means that the tax they pay goes up from a mininum of £100000 to £125000 and they are encouraged to invest in the Island by paying 1% tax on everything else above this tax level
As a middle earner in Jersey on current tax rates it will take me 25 years to pay £125K in tax. For someone to come in and pay this every year is surely a good thing?
Report abuse
RT get people in who are prepared to pay a lot more as opposed to what we are taking in now.
As per the occupation why bring that up? You are from NZ and haven’t got a clue as to what happened in Jersey then.
donald rich people don’t waste money. They will often import the things they want from elsewhere. Some I know bring have brought workmen over from the continent as they are better value. As you aren’t in this bracket you wouldn’t know about these things.
As per needing a gardener are you too lazy to do it? Or are you time poor? As per the job offer no thanks working for others is a waste of time.
If someone is saving millions on tax I think they could stretch to the odd £100,000 or so to give to a local charity don’t you?
Report abuse
#60 “I think it is unfair to call these people tax dodgers when all of us here in the forum pay 20% or less tax.”
There’s nothing wrong with that if you just happen to live here for other reasons, it’s only hypocritical if you have chosen to live her for the purpose of paying less tax. That at least rules out anyone that was born here since this is their home. I paid more tax in the UK, can’t say it bothered me, it’s just money.
Report abuse
#59 To be honest I’m not quite sure what the facts are regarding exisitng 1(1)ks. Maybe the full printed article goes into more detail? They will be required to pay that minimum tax amount by law. Ergo prison for those who disobey! Nevertheless I maintain this is a good thing. It’s a signal from government of a little competitive thinking, something which frankly has been lacking and should be encouraged.
Regards.
Report abuse
Bunny, Donald and Leah: Great to hear voices of reason, to counter the idiocy of Adrian.
Adrian, perhaps you should go study economics, and international taxation before contributing such idiotic statements.
A person doesn’t bring in gardeners/labourers to work on property development (and veen if they did they woudl pay Jersey income tax), they might for specialist work, but not for that work.
get a grip, and stop spouting rubbish you know nothing about.
You are Robinson Crusoe on this one Adrian
Report abuse
What happens if they accidentally or deliberately fall on hard times after living in Jersey for a while?
Suppose that they can no longer find the £125k, will they be forced to leave?
Has this ever happened? Are people ever asked to leave?
Report abuse
“donald rich people don’t waste money”
I was actually shown around a property by an estate agent a few yeas ago. The property was for sale. It had been rented for the previous 9 months by a fund manager relocating to the Island while he looked for a permanent property.
Prior to renting the property, at his own expense the manager had fitted a new top of the range wetroom the likes of which I’d never seen: apparantly it cost over £50k. He had 9 months use of it. The landlord took all the rest of the benefit.
You may want to refer to Scott Fitzgerald’s famous (if apocryphal quote):
Fitzgerald: The rich are different than you and me.
Hemingway: Yes, they have more money.
Unless you have ever been in the position when you have so much capital that however much you spend, you will always have (un)earned more by the end of the day, then you really have no idea.
I’m afraid you have as much understanding of being rich as RT has of being poor.
Report abuse
Some 1(1)K’s have lost income and they are now paying less tax than agreed.
They are allowed to remain in the island, there is no mechanism to make them leave.
A prospective 1(1)K could agree to pay the new terms move to Jersey and then arrange their affairs so they paid very little tax.
Nothing the States could do about it at all as far as I know.
£125K sounds like a lot of money but in States terms with a total budget of £600M+ it is just small change. It would not even cover the salary, let alone the pension and other benefits of one of the senior Humphreys running the island.
It is election year and there has to be a new Chief Minister, Phillip Ozouf is out there catching those rarest of birds, votes.
Watch the weaseling on the platforms when candidates face the question, who will you vote for for Chief Minister, Ian le Marquand or Phillip Ozouf?
Staright answers there will be none!
Report abuse
RT I shall make things a bit clearer for you as you need this to understand things.
As per workmen this was in relation to building works. As per Jersey tax, one has to earn enough to pay this. If not they won’t pay any. Even on a good wage if a workman is brought in from outside the island, and only works for a few months, then it is unlikely that tax would be paid.
Also any low earners not earning enough doing these type of jobs will mean Joe Public tax payer carries the can for any shortfall.
CLV and Anti-Moan I would put money on no one ever getting turfed out, they would just be left to enjoy things where they are, and the tax bill would be “negotiated” downwards.
As per coming to Jersey why come here if it isn’t for the tax perks? This will be the main if not only reason to do this. The CoM are activity encouraging large scale tax avoidance by their actions.
Just in case you are unaware there is growing resentment to tax havens etc. It would therefore be sensible to have a plan B before one gets to the end of the plank.
I have just pointed out the obvious which some people on here just don’t want to know about.
Things are not as rosey as the CoM and their rabid supporters keep making out.
Report abuse
donald “Unless you have ever been in the position when you have so much capital that however much you spend, you will always have (un)earned more by the end of the day, then you really have no idea.”
There’s my point even at 20% tax it is irrelevant to the individual’s life style. It isn’t as if they will miss it as you have so rightly pointed out. This money however would make a big difference to the rest of the population and mean less donations would need to be made to local charity.
“The rich are different than you and me.”
because they are treated differently….
Report abuse
I’m puzzled. To get in, 11Ks are required to have an income of £625,000, resulting in an income tax liability of £125,000 per annum.
Why is it so difficult to raise a tax assessment for every 11K on 1st January each year for £125,000, collect it and, if appropriate, offset it against any higher overall tax bill.
The £125,000 should effectively be a minimum “licence fee” to live here, so that its a non-refundable sum. If his actual income is less than £625,000 then tough – either accept that annual minimum sum or leave. He is free to take advantage of earning tax-free capital gains instead of income, or to hold his investments abroad to benefit from the lower Jersey tax rate for foreign income, but he still pays £125,000 minimum – no buts.
What can be so difficult about that ?
Report abuse
15 X £ 125,000 = £ 1,875,000
Average Jersey earnings of £ 35,000 at a tax rate of 20% = £ 7,000
£ 1,875,000 / £ 7,000 = 267 ‘New’ average tax payers required to raise the same sum generated by 15 1(1)K’s
In the real world of course, at earnings of
£ 35,000, the effective tax rate is nowhere near 20%, so the figure of 267 is probably too low.
In addition, the tax take of £ 1,875,000 is a minimum figure, and once one takes into account GST receipts on consumption, stamp tax on house purchases and the taxation on the multiplier effect of spending on island, and the fact that a number will pay well in excess of the minimum requirement, the truer figure is likely to be much higher.
A more realistic calculation, even using a conservative doubling of the minimum tax take, allowing for these adjustments might be:
Tax take on new 1 (1) K’s of £ 3,750,000 p/a
Income tax receipts on ‘average’ earnings of
£ 35,000 at 10% p/a = £ 3,500
£ 3,750,000 / £ 3,500 = 1,071 ‘new’ average earnings tax payers
Given the base costs of living in Jersey, an ‘average’ income of £ 35,000 per year is unlikely to cover the purchase of a private residence, private healthcare or private education, and there should therefore be an expectation that these 1,071 new taxpayers will also require some level of state spending to sustain their residence on the island.
Cost per pupil at State School (assume 2 Children) = £ 10,000 per annum
Cost of Provision of State Healthcare per annum (assuming household of 4 people) = £ 4,000 per annum.
Ignoring cost of provision of States Housing, this gives a cost per household of £ 14,000 per annum, against a tax receipt of £ £ 7,000 (assuming both adults earning ‘Average’ earnings of £ 35,000 per annum), a deficit of £ 3,500 per earning adult.
Subjective arguments aside, bringing in 15 new residents against finding an additional 1,071 ‘average’ taxpayers to meet the same tax take (Who will in reality have a minimum net cost of £ 3,500 per annum, rather than actually making a net positive contribution), it seems to make economic sense.
Report abuse
Adrian,
If you ask very wealthy people to pay 20% income tax do you know what will happen?
Not very much. Because very wealthy people don’t work for anyone. They don’t have a salary, or at least, they are in control of what salary they do have. They get paid in discretionary bonuses, dividends, capital sums paid on disposals of assets. Most of their assets are held in trust for completely legitimate reasons.
The fact that someone wouldn’t miss something doesn’t mean that they will happily give it up. I have probably a hundred bottles of wine at home: I wouldn’t miss it if 20 of them were taken away. But that doesn’t mean I put them on the front doorstep for anyone to take away.
Whether the rich are being treated differently is a moot point: the truth is, if you treat them the same as the rest of us the outcome becomes completely unpredictable. Basically, if you charge them 20% on income, unless you totally restructure the tax system in such a way that would destroy the finance industry overnight, you make taxation entirely optional.
Report abuse
Horation (73):
Bang on. Whatever threshold we set should be a minimum (or even better, fixed) fee. How it is earned doesn’t matter.
Report abuse
Horatio (73) The £125,000 should effectively be a minimum “licence fee” to live here, so that its a non-refundable sum. If his actual income is less than £625,000 then tough – either accept that annual minimum sum or leave
Well said Horatio, a simple a fair solution.
Report abuse
“Prior to renting the property, at his own expense the manager had fitted a new top of the range wetroom the likes of which I’d never seen: apparantly it cost over £50k. He had 9 months use of it. The landlord took all the rest of the benefit.”
There are rich and poor people who enjoy spending money, some of them like spending it so much that they get through it faster than they can earn it.
However both rich and poor people can be extremely frugal indeed. I know one multimillionaire who invited his tax accountant out for dinner. The tax accountant was expecting a slap up feed at one of St Helier’s best only to find that dinner was at the cafe in Colomberie.
You can’t eat or drink money and you certainly can’t take it with you but there are some people who would be delighted if their private wealth manager could find a way
Report abuse
The £125,000 is a minumum and no matter what their income situtation for the year, they pay the £125,000. Thats the way it is already.
Why is Jersey so anti rich people when they bring so much to the Island? jamesh1 is completely correct in stating that these people bring so much more to the Island than just £125,000. They create work for many people in the Island, provide work for the finance industy, and more importantly spend their cash in the Island on a daily basis.
Its about time Islanders got real regarding the Islands finances and accepted these people for what they provide to the Island.
Report abuse
donald pond (76) or even better, fixed
Sorry Donald, we must allow for inflation. We do not want any more 1(1)ks paying only £10 K or tax less
Report abuse
74, a good analysis. The trouble it assumes other things are equal, ie that we don’t have a government which will simply see this extra income as an excuse to p**s it up the wall with additional waste and dubious projects. Also as someone else on this site has said, it doesn’t send a good signal out to the significant economies that we are happy to erode their tax bases in these difficult times. But yes in isolation I would say the equivalent of 1000 average taxpayers via 15 of these uber tax payers sounds good.
Report abuse
Sara, 44.
The “Super rich” and most of the “non local” building firms in Jersey bring in the “poor” to work for them otherwise they would not be here, they are all paid the minimum wage which is not sufficient to survive in Jersey, many are on benefits to pay the extortionate rents imposed by greedy rich landlords for hovels and s***H****s you would hesitate to put a dog in.
There are wellover 8,000 on income support at the moment, that figure will increase this year.
Report abuse
bona Fide, Thanks for the reply. The States wasteage would be an issue wherever the income comes from.
Seeing us erode someone else’s tax base in difficult times is one way of looking at it. The other way of looking at it is people have the right to live where they want (With some notable exceptions). If a country has to maintain (Or even increase) it’s tax rates to such a high level, because of either it’s economic (mis)management, or it’s desire to redistribute a large percentage of its richest citizens wealth amongst its less well off citizens, then it is that country’s fault if its wealthier residents choose to live elsewhere, not Jersey’s for being that person’s destination of choice.
If I leave a bad job for a better one, it’s not my new employers fault that my old job was bad.
Report abuse
Jamesh1@74. good post
The reason many very wealthy come here is because there is no inheritance tax and a short hop to important places.
The main problem as I see it is, The more the States coffers get, the more they spend without proper checks and balances (100 million overspend ). So its a dreadfull downward spiral.
I wonder what the Comptroller and Auditor General can or will do about the situation.
He seems to have gone very quite recently. He is empowered to get best value for the taxpayer.
Davey West
Report abuse
those on here who argue that the tax earned on 1.1.ks is worth 1000 ‘average’ taxpayers and hence its a no brainer seem to be missing 2 points.
1. Quality of life is not just about money but also community, and
2. If the island was not full of rich people, house prices, wages and services would be cheaper and hence the states would not need to raise so much in revenue.
Report abuse
Great, lets welcome a load of corrupt rich Russian oligarchs and newly made Chinese billionaires.
They have already bought up most of Kensington and Chelsea, and Jersey is perfectly placed as a stop-over before they go to Monaco.
You do know this will mean Jersey will have to have signs in Russian and Mandarin soon?
Report abuse
“If the island was not full of rich people, house prices, wages and services would be cheaper and hence the states would not need to raise so much in revenue.”
Like Anglesey only without central funding from the UK?
Report abuse
#79 Post #85 has the answer. Quality of life is about community far more than it is about money. Human beings are capable of living with very little and still being happy, IF they have a good community. Of course people could be happy with more wealth and a good community, but riches and being part of a good community tend not to co-exist very often.
#87 I can’t speak for Anglesey but people always say the Scottish islands get central funding from the UK and only survive because of it. If they ever actually lived there and saw how much the community does for itself (stuff that on the mainland councils pay people to do) they might think twice about how ‘funded’ they actually are. The Scottish islands are far more self-sufficient than the mainland and don’t rely on Councils for things they can do themselves.
Report abuse
jamesh 1:
Thanks for doing the maths for us – it makes some things clear. However, I take issue with the premise that we should be increasing immigration just so we can tax the newcomers. On your figures, a few extra K cats would yield so much that they would be worth it, irrespective of any wider principle, but the alternative to a small number of high-tax-yielding incomers should be a closed door, not masses of low-tax-yielding incomers. Jersey is already getting uncomfortably full without them.
Report abuse
Or to put it another way 5,000 extra K cats would mean no one else needing to pay tax in Jersey, as long as their contributions were indexed linked, and not like at present where contributions of less than 10,000 are ok.
Or from another perspective if the worldwide tax avoided by the most wealthy individuals and institutions, for one year, was given to Jersey then it would pay to run the island for the next 400 years (at the present level)…
Or help eradicate poverty and feed and clothe the poorest around the world.
Irrespective of wider principles? What might these be?
donald if Jersey joined the EU then the finance industry wouldn’t be such an issue. Also everyone would be part of the EU unlike now where some aren’t.
No matter what you say too many rich individuals in too small an area, do skew everything from house prices to goods and services.
What is wrong with Anglesey by the way? Being in a richer island doesn’t equate to happiness or quality of life. People have got addicted to pretty things and other useless tat in Jersey and other western countries which is no good from either an environmental point of view or from a spiritual one. The population levels have compounded things as well. It doesn’t bode well for the near future nor the next generation.
Report abuse
Adrian:
The wider principle is that we are full to the capacity of our infrastructure already, and should be putting a stop to net immigration altogether. However, another 15 in 95,000 is effectively zero to any meaningful level of resolution, while £4m towards £600m is cetainly enough to help – that could keep a whole small department providing some valued front-line service going.
Report abuse
Adrian, if Jersey joined the EU we would have to give everyone in Europe the right to buy a house here. That’s the dealbreaker.
I don’t disagree that Anglesey isn’t a bad place. But there are no jobs for youngsters. If you want an Island with a much smaller and older population and no funds to pay for infrastructure then fine.
But don’t pretend you can have Frank Sinatra voices for Frank Ifield prices, as was once said.
Report abuse
I doubt very much that having more 11K’s will have much of a difference on the average persons life as the States will just waste the extra revenue anyway.There will be a short term,one off gain for builders,who will renovate their million pound property.We would be better off making the States more transparent and accountable and have non local companies paying some tax here.Though i don’t see that happening overnight.And removing the cap on social security contributions.
Report abuse
Too easy Ozouf!
Just stop spending our cash on all those unnecessary extravegances and start being upfront and honest with those who pay your wages – then there will be no need to look at upping the head count on this already over populated rock!
Report abuse
I would rather a bunch of 11K’s here than the lazy benefit scammers. The teenagers going off having kids just to get housing and benefits.
Can we ship them off?
Report abuse
I agree with Ozouf in this instance. Ideally we’d have no immigration, but if we must then at least bring some wealthy ones in which will lower taxes for the rest of us.
With our shambolic immigration policy at the moment any old rubbish can come over and procreate, 6 months living here then they qualify for income support. No wonder we’re faced with such a crippling welfare burden.
Report abuse