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26,000 islanders given more "breathing room" to pay off 2019 tax bill

26,000 islanders given more

Wednesday 21 February 2024

26,000 islanders given more "breathing room" to pay off 2019 tax bill

Wednesday 21 February 2024


The Treasury Minister has given around 26,000 taxpayers two more years to start paying off their frozen 2019 tax bills, which the government says aims to help some islanders with the rising cost of living.

Taxpayers with frozen bills from 2019 now have until 2027 to begin making payments, and they can take until 2043 to pay off the full amount, Deputy Elaine Millar announced this week.

The change aims to provide relief to some islanders by giving them more flexibility in managing their tax payments — giving them an extra two years to start paying.

Deputy Elaine Millar said: "This decision provides affected islanders with more breathing room to navigate their financial commitments effectively."

In 2020, The States Assembly abolished Prior Year Basis (PYB) tax system — which required islanders to pay their tax for the previous year in arrears.

Under the previous system, if a taxpayer's circumstances change and their income reduces, it can become difficult for them to pay a prior-year's bill on a current year's income.

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Pictured: Treasury Minister Elaine Millar said the decision aimed to provide "breathing room" for islanders.

Approximately £330 million in 2019 tax liabilities were frozen for future repayment, which affected around 31,300 taxpayers.

Since then, more than 5,000 taxpayers have settled the outstanding bill.

The Government introduced a payment scheme in 2021, originally set to start in 2025. This plan involved taxpayers paying a small portion of their frozen 2019 tax liability each year, starting from 2025 until 2041. For most people, this would have been less than £35 per month.

The recent announcement gives taxpayers more time to start paying.

Additionally, those who reach pensionable age can choose to pay the full amount within 12 months of reaching that milestone. The deadline for making this decision has also been extended to 2026.

READ MORE...

Tax plan U-turn sees thousands offered 20 years to pay last year's bill (October 2020)

Islanders split over tax reforms (October 2020)

Islanders given 10 years or more to repay tax bill (August 2020)

Tax write-off 'would cost £320m' (August 2020)

Plans to scrap prior year tax system announced (July 2020)

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