Small businesses will be protected from the administration costs of GST, Policy & Resources has said.
The committee is going to try again to get approval for the tax as it looks to fund the work of the States.
Non-finance businesses will need to have a turnover of more than £300,000 a year to register for GST under its current modelling, although this is still in the planning stages.
It will mean they will not need to submit quarterly returns or charge the tax to their customers, but they also can not claim back the tax that they pay on their supplies.
Pictured: The Policy and Resources Committee.
In the UK the threshold for VAT registration (a GST equivalent) is a business turnover of £85,000; in Jersey it is £300,000.
The detail is contained in a series of Frequent Asked Questions published by the committee at ourfuture.gg/public- finances.
“I appreciate that it is unrealistic to expect many members of the community to be able to find the time to read a 150-plus page policy letter, so the website content and Frequently Asked Questions are designed to try and give people the core information they need,” said P&R Vice-President Deputy Mark Helyar.
“As an example, one of the claims we hear regularly is that GST will damage small businesses.
“It’s not true, but it’s a common misunderstanding. In most similar systems, very small businesses are not required to register for Goods and Services Tax.
Pictured: More information on the tax proposals are available at ourfuture.gg/public- finances.
“In the UK the threshold for VAT registration (a GST equivalent) is a business turnover of £85,000 but the Committee’s plans are modelled on £300,000. At this level it is estimated that more than 50% of incorporated businesses outside of the finance sector would not be required to register. This high registration threshold helps protect smaller businesses from the cost of administration.
“And for those businesses that would be required to collect GST and remit it to the States, because this kind of tax is very common around the world modern accounting and till systems have modules to help businesses manage this.
“The Committee would encourage as many people as possible to review the content on ourfuture.gg, including our sustainable option which will result in lower tax for people on low incomes while also protecting the “squeezed middle”, before taking a position on the proposals.”
As part of its plans to make the island’s finances more sustainable that will be debated next month, P&R wants to introduce a 5% GST, with a lower income tax band of 15% on earnings up to £30,000, while also borrowing £350m. for major projects
The social security system would be restructured and corporate taxation reviewed.
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