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It’s going to be more expensive to drink wine and spirits, smoke, put petrol in your car and go online shopping from next year – but the price of a pint of beer or cider isn’t set to get any more costly.
Unlike the UK Government, which is raising National Insurance contributions to pay for social care, there will be no new taxes in Jersey next year.
However, the newly published Government Plan is proposing that existing fuel and tobacco duty should rise above inflation and – from 2023 – the threshold above which consumer pay GST on internet purchases should fall from £135 to £60.
If States Members approve the plan, the most popular online retailers such as Amazon will also charge GST at the point of sale rather than when the goods arrive at Customs, as happens now.
The Government is not planning any across-the-board tax rises – indeed personal tax allowances are rising by 3.3% to match the average earnings index.
Pictured: Changes to allowances.
This means that the married/civil partners’ allowance rises by £850 to £26,550, which is, for the first time, the same allowance for islanders born before 1952.
The increasing allowances mean that islanders are £8m better off while the exchequer is down by the same amount.
The Government is making up £4.9m of that shortfall, however, by raising duty on wine and spirits by 5% (bringing in £0.8m next year), cigarettes by 9.5% (£1.5m) fuel (£2.2m) and vehicle emissions duty (£0.4m).
Pictured: Vehicle emissions duty changes.
For shoppers, this means a 75cl bottle of wine will be 8p more expensive, and the price of a litre of a spirit will rise by 85p.
20 king size cigarettes will be 65p more expensive (inflation plus a 6% increase in standard duty), while a 50g hand-rolling tobacco pouch will go up by £3.55 (inflation plus 10%).
Fuel will go up by 5p per litre, with 3p of this going towards the Climate Emergency Fund to help Jersey towards its ambition of achieving carbon neutrality by 2030.
Pictured: A summary of the impôts changes.
Looking beyond next year, the Government is riding on the coattails of a UK initiative to get online retailers to charge VAT at the point of sale. This means, with a tweak of their systems, large offshore retailers, such as Amazon, can charge 5% GST and then send it on to the Treasury.
It also means that Customs Officers in Jersey will have more capacity to deal with online items from other retailers, meaning that the level above which consumers will have to pay tax on each item will fall from £135 to £60 from 1 January 2023.
This will go some way to satisfy local retailers, who have long highlighted the disparity between internet and high street sales when it comes to GST.
The Treasury is also exploring changing the rules around personal income tax residency and business interest rules.
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