Jersey’s tax system has been branded “technologically behind” after it emerged that Islanders are still being refunded overpaid tax by letter and cheque – a process even the Treasury Minister described as “outdated”.

Deputy Elaine Millar said she “accepts” that the current system can appear antiquated in a modern financial world dominated by instant digital payments.

Despite rapid advances in banking technology, Revenue Jersey continues to rely on a cheque-by-default approach for both tax and Social Security refunds.

“Inefficient and technologically behind”

One islander told Express that they were “flabbergasted” by the experience after receiving a recent tax refund.

“I had a refund recently, and once confirmed over the phone, they then posted a letter to say I’ll get the refund in the next ten days,” they said.

“A few days later, I received the cheque in the post – a cheque which I then had to go and pay in. So, a letter and then an actual refund.”

“How much money is being wasted with this inefficiency?” they asked. “I don’t understand how a government department is so inefficient and technologically behind.”

Deputy Millar acknowledged that “this approach seems out of date compared to how many businesses operate”, adding that Revenue Jersey is looking to move towards electronic repayments.

However, she insisted there are reasons for the cautious pace of change – pointing to fraud risks associated with digital payments.

“This needs to be done in a robust way, as Revenue Authority processes are recognised targets for fraudsters,” she explained.

Electronic repayment trials later this year

Highlighting the potential dangers, the Treasury Minister referenced a major UK case in which HMRC lost £47 million to fraudulent tax repayment claims following a phishing attack.

For now, islanders who cannot use cheques are able to request a BACs transfer – but only by making specific arrangements.

Treasury has confirmed it will begin trialling electronic repayments as the default option later this year – initially limited to businesses.

“Revenue Jersey will begin by rolling out BACs-by-default repayments to corporate entities later this year,” said Deputy Millar.

“After learning any lessons, they will be looking to then expand this approach to individuals.”