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Ian Gorst’s Council of Ministers has backed down from ending the Christmas bonus just hours before the Budget debate, with pensioners protesting as Members entered the States Chamber this morning.
Although they are pressing ahead with plans to phase out the extra £3,000 tax allowance for pensioners and mortgage interest tax relief, the Council of Ministers have signalled that they will keep the Christmas Bonus.
They still want an amendment guaranteeing an £85 bonus for all pensioners who don’t pay Income Tax to be scrapped – but have pledged to bring back new proposals for a mean-tested bonus in the next 12 months.
The budget, which is being debated over the next few days by the States, proposes measures that would increase tax revenue by £1.8 million next year – but it also sets up proposals that will go much further over the next few years.
Cutting both mortgage interest relief and pensioner allowances would ultimately increase Islanders’ Income Tax bills by around £15 million per year, but ministers’ plans are to gradually phase them out over 12 years.
The phasing out would start in 2017, and no new entrants will be allowed to get the extra tax allowance for pensioners.
The budget proposals are:
Income Tax…
- Standard exemption for marginal-rate payers goes up by 0.9% in line with inflation.
- Mortgage interest tax relief to be phased out over 12 years.
- Added exemption for pensioners to be phased out.
- Increase tax relief for child care from £12,000 to £14,000.
- For top earners at 20% rate allowances for children to be phased out.
- Reduction in relief for non-residents.
Duty increases…
- A bottle of spirits goes up 6.6% to a total of £13.83.
- A bottle of wine goes up 1.3% to a total of £1.47.
- A pint of beer goes up 0.9% to a total of 35 pence.
- A pint of strong beer goes up 4.9% to a total of 61 pence.
- 20 cigarettes goes up 6.7% to a total of £5.32.
- A litre of petrol goes up 2.1% to a total of 46 pence.
Vehicle Emissions Duty…
- Increase income from VED by hitting polluting vehicles.
- Discount for older vehicles cut.
- The 85% discount for hire car firms to be cut.
- VED to be worked out by emissions for commercial vehicles.
Plans for 2016…
- Options paper for independent taxation.
- Change Income Tax system for same-sex marriage.
- Continue work on Property Tax.
- Review 1(1)k tax system.
- Review Benefits in Kind.
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