Saturday 05 December 2020
Select a region

Finance tax bills provided early pandemic cash injection

Finance tax bills provided early pandemic cash injection

Friday 28 August 2020

Finance tax bills provided early pandemic cash injection


A group of finance firms agreed to pay off their tax bills early to help the Government with cashflow in the early stages of the pandemic, it has emerged.

It was clear from an early stage that dealing with the effects of the health crisis was going to strike a blow to the public purse.

As covid nerves hit global markets, the 'Rainy Day Fund' - officially known as the Strategic Reserve - dropped by more than £150m in the early part of this year.

As the Government had to move quickly to invest in crucial equipment and infrastructure to cope with the pandemic, an independent report suggested that the local economy was to contract 6% and the Assistant Treasury Minister Senator Ian Gorst began warning that taxes would likely have to rise in future to fill the hole left in public finances by covid. 

coronaviruscovid19economyrecession.jpg

Pictured: At one point, Jersey's economy was estimated to be haemorrhaging £120m a month.

Later, the Government arranged what was described as a "super duper overdraft" of £500m with local banks as a safety net.

Keen to assist with the forecast difficulties on the horizon, a number of finance firms agreed to pay 100% instead of 50% of their taxes In advance to Revenue Jersey as a way of assisting Government with cashflow.

Jersey Finance declined to name which firms had taken part in the initiative, which they said was led by the industry.

CEO Joe Moynihan told Express that this was just “one example of how the finance industry has looked to be proactive in its support of the economy during these difficult times.” 

Joe_Moynihan_1_1.jpg

Pictured: Jersey Finance CEO, Joe Moynihan.

“Alongside advance tax payments and ensuring it has continued to contribute to government finances through payroll taxes and social security contributions, the industry has also volunteered its expertise through Jersey Business to support local businesses where possible, especially small and medium sized firms and it continues to help local charities through volunteering and donations to the Bailiff’s Fund and to other local charities,” he added.

When asked how much of a boost the early tax pay-off provided, the Government said that it would not “comment on the affairs of individual taxpayers”.

Despite initial fears, Jersey has, in fact, fared better than expected in response to the pandemic.

Earlier this month, the Government admitted to Express that just £5m (1%) had been drawn from its £500m safety net, and that the ‘Rainy Day Fund’ hadn't been touched at all.

After dropping to around £750m, the reserve funding pot has nearly returned to its pre-pandemic level of around £920m.

Sign up to newsletter

 

Comments

Comments on this story express the views of the commentator only, not Bailiwick Publishing. We are unable to guarantee the accuracy of any of those comments.

Once your comment has been submitted, it won’t appear immediately. There is no need to submit it more than once. Comments are published at the discretion of Bailiwick Publishing, and will include your username.

Posted by john garner on
When asked how much of a boost the early tax pay-off provided, the Government said that it would not “comment on the affairs of individual taxpayers”...............the Government was not asked individual contributions ..just a ball park figure of the whole emergency early payment
Posted by L Brindle on
And the price to the Jersey taxpayer for this magnanimous gesture is what, exactly? No free lunches around here, that's for sure.
To place a comment please login

You have landed on the Bailiwick Express website, however it appears you are based in . Would you like to stay on the site, or visit the site?