Most of us consider paying tax to be an unpleasant necessity. We probably don’t spend any time appreciating the positives of our tax system. For example, HMRC regulations treat men and women the same.
Why wouldn’t they?
A reasonable question.
But not all tax systems are based on the principles of equality. Jersey is currently in the news as it starts to abolish its ‘only husbands talk’ rule. A story that does help us appreciate this degree of fairness within the UK’s taxation.
What is the ‘only husbands talk’ rule?
This ‘only husbands talk’ rule is currently in effect in Jersey. It means that a wife needs her husband’s permission to file her own income tax return. Under Jersey regulations, ‘a couple’ means a heterosexual couple that are married and only the husband can sort out their taxes. Up until 2003, a wife couldn’t even file as a separate person.
The ‘only husband’s talk’ nickname comes from the part of the regulations which states that a woman can only speak to Revenue Jersey if her husband has given prior permission by contacting the tax office.
Some progress was made in 2013, when the income tax forms were altered to include a consent box for husbands. They can now tick the box to show they consent to their wives submitting on their own. This is known as applying for separate assessment. Otherwise the man has to file both forms.
How is this changing?
Proposals to give women equal rights and responsibilities under Jersey tax law are due to be debated at the beginning of February. They also aim to include people who are in civil partnerships, not just straight married couples.
The Treasury Minister, Deputy Susie Pinel, announced the proposals to be debated in March 2019, saying: “I am determined to end the way married women are treated as the financial chattels of their husbands by Jersey’s personal income tax system. The department has been consulting islanders on the way ahead, and I expect to receive the results in the next few weeks.
The main options for change are clear: either independent taxation, where everyone is taxed individually on their own income, or a form of household taxation that taxes a couple on their joint income regardless of marital status. Treasury officials are analysing the results to determine the best option for Jersey and I will give my own conclusion in July as part of the Government Plan 2020-2023. If the States Assembly agrees with my preferred option, I plan to propose draft legislation as early as possible in 2020, and will aim for 2021 to be the first year in which husbands and wives are taxed under the new regime.”
These proposals are informed by the results of a survey which asked Jersey citizens their opinions about, amongst other things, income tax, personal allowance and tax rates.
When will it change?
As with any new legislation, it takes years to implement radical change. If the proposals are passed in February, the aim is to have eliminated the ‘only husbands talk’ rule by January 1st 2021. Both civil partners and spouses will be able to talk to Revenue Jersey of their own volition.
The rights and responsibilities for completing and submitting a joint return will be equal from 2022. As will the liability for paying the total income tax bill owed by the couple. And 2023 will see the introduction of independent taxation for everyone in Jersey, with an inbuilt transition period.
But this schedule will only be followed if the proposals are passed into law after the February debates.
What else is different about Jersey tax law?
Jersey is part of the British Isles with Guernsey and the Isle of Man (not the UK or Great Britain) and is a British Crown Dependency. They have their own legal, financial and governing bodies that are completely independent. Jersey citizens pay income tax, like we do, and they have some other taxes. None of the Channel Islands charge VAT. In Jersey there is a 5% Goods and Service Tax (GST) on some services and goods.
Appreciate what we’ve got
Stories like these are a little nudge to appreciate what we’ve got. Nobody actually likes paying tax of any kind. The best we can manage is a system that treats everyone fairly and UK law usually means that HMRC are doing a good job of that.