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Language school calls for tax breaks on lodgings

Language school calls for tax breaks on lodgings

Friday 26 August 2022

Language school calls for tax breaks on lodgings

Friday 26 August 2022


A local language school is calling for islanders to get a tax break when renting a spare room in their home after seeing the number of lodgings available for their students drop by a third over the last decade.

St. Brelade’s College is calling for the creation of scheme similar to the one in the UK under which a £7,500 tax-free threshold is offered to those who rent a furnished spare room in their home.

In a letter shared with the Corporate Services Panel, which is currently conducting a ‘Cost of living Mini-Budget Review’, the College’s Principal, Sid Brown noted that local households are currently taxed at their standard rate, with a 50% tax on any income if they provide meals.

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Pictured: St. Brelade's College provides English courses to international students, as well as extra-curricular activities and stay in a local host-family or ‘homestay provider’.

The College was founded in 1978 and provides English courses to international students, as well as extra-curricular activities and stay in a local host-family or ‘homestay provider’.

However, Mr Brown said that over the last decade, the number of local families who have been hosting students has “steadily declined”, with only a third of homestay providers from five to 10 years ago available in 2022.

This drop, Mr Brown said, was caused not only by the “pressures” of the cost of living but also by Government policies, causing the island to lose out on potential revenue.

“In 2018 the Government launched a ‘crackdown’ on lost income tax from private lodgers,” he wrote. “While justifiable, the method was intimidating and the effect was a further deterioration in our homestay base; too many people either do not understand the tax rules or are simply worried they may inadvertently make a mistake and be permanently blacklisted.”

“This drop in available accommodation has an inevitable knock-on effect on the economy as 90% of our revenue goes straight back into the local economy either via homestay payments or through wages, suppliers, transport etc,” he added. “Put bluntly the island is losing out in potential £m’s of export revenue by not encouraging this sector. (Not to mention the GST which is levied against course fees, unlike in the UK where language courses are exempt from VAT).”

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Pictured: Mr Brown said host families should be rewarded for their efforts not "further taxed".

In addition, the Principal said the situation is also causing the island to lose out on “the intangible benefits a thriving language school industry provides”, citing the positive testimony from a young German student who stayed in the island this summer, describing her experience as “one of her unimaginably most beautiful summer experiences ever”.

In her letter, she mentions the kindness and understanding of islanders, her “dream family”, the “pleasant” weather, the “beautiful sunsets” and the connection with “students of all nations”.

“As a result, I can say: I am better in English, more self-confident and more independent,” she concluded her testimony. “So, I can really recommend this trip to EVERYONE.”

Mr Brown argued in his own letter that hosts families should be “rewarded” for their efforts in giving students a “positive experience” and “lifetime memories” of the island as “an open, multi-cultural island around the world”, rather than “further taxed”.

“As the cost-of-living rises, we may expect to see an increase in people looking to host to make up their income,” he wrote. “However, this will be offset by their expenses – mainly the soaring cost of food and utilities. While we generally welcome broad based tax cuts as a means to tackle the cost of living, it is difficult to see this as a targeted response.

“Living in Jersey it is all too easy to observe that many islanders are not suffering from cost-of-living pressures and this cut will simply fuel inflation, further exacerbating the problem.”

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Pictured: The College Principal said a tax break would support "hard working households that are prepared to make sacrifices to their daily lives".

He argued a tax break for those who rent furnished accommodation in their homes, in a similar way to the “Rent a Room Scheme” in the UK which allows families to earn up to £7,500 per year tax-free, would be “targeted”.

“It will overwhelmingly support hard working households that are prepared to make sacrifices to their daily lives – for example by asking their children to share a bedroom for a few weeks over summer in order to free up a room,” Mr Brown wrote. 2Also retired couples, who won’t benefit from any income tax or social security reductions. It will stimulate the visitor economy by increasing the bed capacity at a time when hotels and guests house are declining at an alarming rate. It would also encourage people to make space available for essential key workers.”

The Government published its ‘mini-budget’ to help islanders cope with rising prices earlier this month. It includes measures such as a 12% increase in income tax thresholds from 1 January, a three-month 2% reduction in SS contributions on the employee, or self-employed, as well as a six-month delay to reducing the GST threshold on internet sales.

The States Assembly is currently set to debate the proposals on 13 September.

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Over the coming months, Express will be focusing on how islanders are being affected by the rising cost of living locally and what is being done to resolve it.

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