Tax changes ahead for thousands

Friday 04 February 2022

Around 13,000 women will start submitting their own tax forms in 2024 if the Policy & Resources Committee approves proposals it is due to consider shortly.

At present, a husband is legally required to submit tax returns on behalf of the married couple, including his wife’s income as well as his own, unless the couple applies to keep their tax affairs separate and makes distinct submissions.

The Policy & Resources will be asked to approve regulations which would introduce independent taxation with effect from 1 January 2023. 

Independent taxation means that each taxpayer is treated individually and required to submit their own tax return.

Work is already underway to update systems at the Income Tax – now part of the States’ Revenue Service – in anticipation of the Committee agreeing the necessary regulations.

Pictured: Moving to independent taxation may be a simple concept, but it requires substantial changes to legislation and the systems at the States' Revenue Service 

“Communication of this change will commence later this year to spouses who will be required to complete their own 2023 tax return,” said the States.

“A webpage will also be set up with further information.”

As part of the 2018 Budget, the States agreed in principle to move to independent taxation.  

In 2020, when presenting the first stage of the legislative changes necessary to put independent taxation into effect, the then President of the Policy & Resources Committee, Deputy Gavin St. Pier, said the current arrangements were “an indefensible embarrassment”.

“I am delighted that the States made a decision a little while ago to implement independent taxation, in the knowledge that making the change will also align the rules around income tax with those around social security contributions, which are already gender neutral,” he said.