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Corporation tax, parish rates, cohabiting couples and booze dues – these were just some of the challenges to the Treasury's 2017 Budget.
Overall, the Budget was passed 35 votes to two – Deputies Deputies Sam Mézec and Mike Higgins voted against – but not without a lively debate.
The final draft will come as a blow to big retailers operating in Jersey, after it was agreed that “a higher rate of tax on profit should be applied to retail businesses operating in Jersey, whether owned by Jersey resident companies or by non-resident companies.” At present, large retail businesses are currently subject to tax at 0%.
Originally proposed by Senator Sarah Ferguson, the idea initially proposed taxing retailers with more than £500,000 a year in profit, at 20%.
However the States agreed an amended version which didn't specify exactly which retailers would pay the new tax, or how much they would pay - that will be decided next year:
"Although the retail tax model utilised in Guernsey, and similarly the model utilised in the Isle of Man, is a sensible starting point for the rules that might ultimately be introduced in Jersey, it is inadvisable to be so prescriptive on the details at this stage. The Minister’s amendment to the amendment therefore maintains the position he has outlined in recent months (i.e. he is seeking a way to subject the profits of larger retail businesses to a higher rate of tax), but maintains the flexibility to introduce a set of rules that are ultimately appropriate in the context of Jersey."
The Treasury Minister will also now have to come back with a fresh proposal for the States to pay Parish rates, after the principle of the move was agreed, but not the actual legislation needed to put it into place - that part was lost on a narrow vote, after a last-ditch battle from the Constables, who were concerned about the other side of the deal: that the parishes would have to pay the Island-wide rate in return.
The biggest loser in yesterday's decision was St Helier, where the majority of States property is located. So far its not been decided how the States would find the money to pay rates.
St John Deputy Tracey Vallois proposed tax parity between married/civil partnership couples, and unmarried couples.
In a vote of 34 to two – voted against by Deputies Mézec and Southern – it was agreed that personal tax allowances awarded to cohabiting couples with one child or more would be phased out.
Day 2 of the Budget Debate Jersey. @TAVallois proposing her amendment seeking tax parity between married/CPs and unmarried couples.
— Deputy Jeremy Maçon (@DeputyMacon) December 14, 2016
Under the new budget, landlords will see their taxable income increased. A suggestion by Deputy Sam Mézec means that landlords will no longer be able to claim owner's parish rates as a business expense to mitigate their Income Tax liability. The vote was passed with 32 pour, two contre and one abstention.
Deputy Mézec's amendment was adopted, as amended, by 32 votes to 2 with 1 abstention.
— States Assembly (@StatesAssembly) December 14, 2016
It was good news for publicans, however, who cheered the success of Deputy Russell Labey in ensuring that alcohol tax would not rise above 1.5% - in line with inflation.
Mark Crowther, CEO of Liberation Group, told Express yesterday:
“I am pleased to hear that Deputy Labey’s amendment was successful.”
“I would like to thank all the States Members who voted in support as this is very positive for our hospitality sector and the island of Jersey.”
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