Work "ongoing" in move to independent taxation

Monday 09 August 2021

The States of Jersey are set to vote on disposing of a 93-year-old law that makes a husband legally responsible for his wife’s tax affairs. In Guernsey, this separation was approved as part of the 2020 Budget and is on track to be implemented - but not before 2024.

The system of joint taxation prior was deemed outdated by the President of Policy and Resources at the time, Deputy Gavin St Pier. The policy change was rolled in with wider changes to the Revenue Service, which, as a whole, were earmarked to cost in the region of £12 million.

The modernisation of marriage taxation is being implemented in two ‘phases’.

The current system allows for a married woman or younger spouse to request that their tax affairs are kept separately, however the default remains that the husband remains legally responsible. 

“Phase 2 [of the changes] has seen the majority of legislative changes required now made,” said a P&R spokesperson.

“These changes will be switched on once all the remaining legislative changes have been resolved and the necessary IT changes have been completed.”

Pictured: "The current system of joint taxation for married couples is outdated and inequitable. Frankly, in 2020, it’s an indefensible embarrassment," Deputy St Pier at the time.

Full independent taxation should come into effect once the revenue transformation programme is complete, which is expected to be in 2024.

Changing policy is a complicated process and it was seen to be more cost effective to tie it in with a wider change programme, which is why P&R say it is taking a long time to implement.

“Work is ongoing to enable the full introduction of independent taxation through the Revenue Service Programme, which will align the rules around income tax with those around social security contributions, which are already gender neutral,” said the P&R spokesperson.

“This will mean that an extra 13,000 people will be required to complete a Tax Return but with a more flexible IT system in place, will see a reduction of the operational impact on the service in the long run.”