Social
Security (Amendment of Law No. 13) (Jersey) Regulations 2020
Made 4th November 2020
Coming into
force in accordance with Regulation 5
THE STATES make these Regulations under Article 50
of the Social Security (Jersey) Law 1974[1] –
1 New
Article 54E (Transitional provision for payment of LTC instalment in 2020)
inserted into Social Security (Jersey) Law 1974
After Article 54D of
the Social Security (Jersey) Law 1974[2] there is
inserted –
“54E Transitional provision for
payment of LTC instalment in 2020
(a) the person is required to
pay an instalment of income tax under paragraph 25 of Schedule 5 to
the 1961 Law; and
(b) the person is an insured
person.
(2) The
instalment is due and payable on 31st May 2021.
(3) If,
at 31st May 2021, an income tax assessment has not been made for the
person for the 2020 year of assessment, the amount of the person’s
instalment is calculated as follows –
Where –
A is the amount of the instalment;
B is 0.5 if the person’s income for
the year before the year of assessment did not include any earnings, and is 0.4
in any other case;
C is the person’s estimated LTC contribution
for the 2020 year of assessment (determined in accordance with paragraph 2A
of Schedule 1D); and
D is the amount of LTC contribution already
paid for the 2020 year of assessment (not including an amount deducted
under Article 41B or 41E of the 1961 Law).
(4) If,
at 31st May 2021, an income tax assessment has been made for a person for
the 2020 year of assessment, the amount of the person’s instalment is the
lower of –
(a) the person’s remaining
LTC contribution liability for the 2020 year of assessment; and
(b) the amount calculated using
the formula in paragraph (3).
(5) If
a person’s instalment of income tax under paragraph 25 of Schedule 5
of the 1961 Law is waived or reduced under Article 41AA of that Law,
the person’s instalment of LTC contribution is correspondingly waived or
reduced and the Comptroller must repay any amount determined to have been
overpaid.
(6) In
this Article, unless the context requires otherwise, terms defined in the 1961 Law
but not in this Law have the meaning given in the 1961 Law.”.
2 Schedule 1D to the Social Security
(Jersey) Law 1974 amended
(1) In
paragraph 1 of Schedule 1D to the Social Security (Jersey) Law 1974[3], the definition “new
taxpayer” is repealed.
(2) In
paragraph 2A of Schedule 1D to the Social Security (Jersey) Law 1974[4] –
(a) in sub-paragraph (1),
for “(the “payment year”)” there is substituted “of assessment”;
(b) in sub-paragraph (2)(a),
for “payment year” there is substituted “year of assessment”;
(c) in sub-paragraph (2)(i), for “preceding the payment year” there is substituted
“before the year of assessment”;
(d) sub-paragraph (2)(ii)
is deleted;
(e) in sub-paragraph (2)(iii),
for “payment year” there is substituted “year of assessment”;
(f) for sub-paragraph (3)(a)
there is substituted –
“(a) calculating an estimate of
the amount of a person’s LTC contribution for the purposes of paragraph 1
of Schedule 1A to the 1961 Law;”;
(g) sub-paragraph (3)(b)
is deleted;
(h) in sub-paragraph (3)(c) –
(i) “new” is deleted,
(ii) for “Article 41C(5)” there is substituted “Article 41C”;
(i) sub-paragraph (4)
is deleted;
(j) in sub-paragraph (5)(a),
“new” is deleted;
(k) sub-paragraph 5(b)
is deleted.
(3) In
paragraph 3 of Schedule 1D to the Social Security (Jersey) Law 1974[5], for “Article 41A
of the 1961 Law as modified by Article 49B of the 1961 Law”
there is substituted “Article 49B and paragraph 1 of Schedule 1A
to the 1961 Law”.
(4) In
paragraph 4 of Schedule 1D to the Social Security (Jersey) Law 1974[6] –
(a) sub-paragraph (1) is
deleted;
(b) in sub-paragraph (2),
in the definition of “L”, for “the payment year” there is substituted “the
year to which the rate applies”;
(c) in sub-paragraph (2),
for the definition of “I” there is substituted –
“I is the estimated sum, for the year to
which the rate applies, of the amount of income for which the employee is
liable to be assessed and the amount of income from which the employee is
liable to allow the deduction of tax.”;
(d) in sub-paragraph (5) –
(i) for “an election under
Article 41C(9A)” there is substituted “a request under Article 41CB”,
(ii) for “agreed by the
Comptroller under Article 41C(9B) of that Law” there is substituted
“approved by the Comptroller”,
(iii) for “the rate of tax
notified under Article 41C(9A) of the 1961 Law and agreed by the
Comptroller under Article 41C(9B) of that Law” there is substituted “the
new rate of tax”;
(e) in paragraph 4(6)(b)
there is deleted “in accordance with Article 41C(7)
of the 1961 Law,”.
(5) In paragraph 4A(1)
of Schedule 1D to the Social Security (Jersey) Law 1974[7], for “means midnight on 30th November in a year” there is
substituted “has the meaning given by Article 41I(1) of the 1961 Law”.
3 Article 49B of the Income Tax (Jersey) Law 1961 substituted
For Article 49B of
the Income Tax (Jersey) Law 1961[8] there is
substituted –
“49B General provision for
collection of long-term care contributions
(1) An
insured person who is liable to pay instalments of income tax under Article 41A
must also pay instalments of LTC contributions in accordance with paragraph 1
of Schedule 1A.
(2) The
combined effective rate for an employee who is an insured person is calculated
in accordance with paragraph 2 of Schedule 1A.
(3) Articles 41B
and 41E have effect with the modifications shown in Part 2 of Schedule 1A.
(4) Nothing
in this Article or in Schedule 1A –
(a) confers a right of appeal
under this Law in respect of a person’s liability for or the amount of an LTC
contribution;
(b) confers a right of appeal
under this Law against the part of a combined effective rate that relates to
LTC contributions; or
(c) makes it an offence under
this Law to fail to remit an LTC contribution to the Comptroller or to do any
other thing in relation to LTC contributions.
(5) In
this Article and in Schedule 1A –
4 Schedule 1A to the Income Tax (Jersey) Law 1961 substituted
For Schedule 1A to
the Income Tax (Jersey) Law 1961[11], there is substituted
the Schedule 1A set out in the Schedule to these Regulations.
5 Citation and commencement
(1) These
Regulations may be cited as the Social Security (Amendment of Law No. 13)
(Jersey) Regulations 2020.
(2) Regulation 1
comes into force on 16th November 2020.
(3) The
remainder of the Regulations come into force on 1st January 2021.
SCHEDULE
(Regulation 4)
NEW
SCHEDULE 1A TO THE INCOME TAX (JERSEY) LAW 1961
“SCHEDULE 1A
(Article 49B)
collection of long-term care contributions
PART 1
1 Collection of long-term care
contributions: payments of instalments
(1) A
person who is required to pay instalments of income tax under Article 41A
must pay instalments of LTC contributions if the person is an insured person.
(2) The
person must pay 2 instalments of LTC contributions, which are due and
payable on the same dates as the instalments of income tax.
(3) The
amount of a person’s first instalment is calculated as follows –
Where –
A is the amount of the instalment;
B is 0.5 if the person’s income for the year before the
year of assessment did not include any earnings, and is 0.4 in any other
case;
C is the person’s estimated LTC contribution for the year of
assessment in which the first instalment is due (determined in accordance with paragraph 2A
of Schedule 1D of the Social Security (Jersey) Law 1974[12]); and
D is the amount of LTC contribution already paid for the year of
assessment in which the first instalment is due (not including an amount
deducted during the year under Article 41B or 41E).
(4) If,
at the time the second instalment is payable, an income tax assessment has not
been made for a person for the year of assessment, the amount of the person’s
second instalment is calculated as follows –
Where –
A is the amount of the instalment;
B is 0.5 if the person’s income for the year before the
year of assessment did not include any earnings, and is 0.4 in any other
case;
C is the person’s estimated LTC contribution for the year of
assessment in which the first instalment is due (determined in accordance with paragraph 2A
of Schedule 1D of the Social Security (Jersey) Law 1974[13]); and
D is the amount of LTC contribution already paid for the year of
assessment (not including an amount deducted during the year under Article 41B
or 41E and the amount paid for the first instalment).
(5) If,
at the time the second instalment is payable, an income tax assessment has been
made for a person for the year of assessment, the amount of the person’s second
instalment is the lower of –
(a) the
person’s remaining LTC contribution liability for the year of assessment; and
(b) the
amount calculated using the formula in sub-paragraph (4).
2 Collection of long-term care contributions: combined
effective rates
(1) The
combined effective rate applicable for a year to an employee who is an insured
person is the lower of –
(a) the
sum of the rate calculated using the formula in Article 41C(2) and the LTC contribution effective rate determined in
accordance with paragraph 4 of Schedule 1D to the 1974 Law,
rounded up to the nearest whole number; and
(b) the
maximum combined effective rate for the employee in sub-paragraph (2).
(2) The
maximum combined effective rate for an employee is –
(a) 22%, if
the employee has no arrears of income tax;
(b) 27%, if
the employee has arrears of income tax for one year of assessment;
(c) 32%, if
the employee has arrears of income tax for 2 years of assessment; and
(d) 37%, if
the employee has arrears of income tax for 3 or more years of assessment.
(3) If
one or more of the variables used to calculate an employee’s combined effective
rate changes, the Comptroller may determine a revised rate for the employee by
applying sub-paragraph (1) using the new variables.
(4) If
the Comptroller considers that the revised rate determined under sub-paragraph (3)
will not recover the employee’s income tax liability and LTC contribution
liability (including arrears for previous years) by the end of the year to
which the rate applies, the Comptroller may determine a revised rate that is
the lower of –
(a) the
rate calculated using the formula in sub-paragraph (5), rounded up to the
nearest whole number; and
(b) the
maximum rate for the employee in sub-paragraph (2).
(5) The
formula for calculating a revised rate in the circumstances described in sub-paragraph (4)
is –
Where –
A is the revised rate;
B is the amount of the employee’s estimated liability to income
tax for the year to which the rate applies;
C is the employee’s total arrears of income tax (if any) for any
earlier year of assessment (whether or not judgment has been obtained in
respect of the arrears) and any costs recoverable in respect of those arrears;
D is the amount of the employee’s estimated liability to LTC
contributions for the year to which the rate applies;
E is the employee’s total arrears of LTC contributions (if any)
for any earlier year (whether or not judgment has been obtained in respect of
the arrears) and any costs recoverable in respect of those arrears;
F is the amount of income tax already paid for the year to
which the rate applies, including any amount deducted during the year under
Article 41B or 41E; and
G is the amount of LTC contributions paid for the year to which
the rate applies, including any amount deducted during the year under Article 41B
or 41E; and
H is the estimated sum, for the remainder of the year to which
the rate applies, of the amount of income for which the employee is liable to
be assessed and the amount of income from which the employee is liable to allow
the deduction of tax.
(6) The
following Articles apply in respect of an employee who is an insured person as
if references to a rate determined to apply to the employee are references to
the employee’s combined effective rate –
(a) Article 41CB
(revised rates: initiated by employee);
(b) Article 41CC
(notification of rate);
(c) Article 41CF
(rates do not prevent recovery of arrears).
PART 2
41B Duty of employer to deduct
and account for tax [and LTC contributions]
(1) An
employer shall, in accordance with this Article, deduct tax at [the combined
effective rate] from earnings payable by the employer to an employee, including
any payments made by an employer that fall within Article 62D.
(2) [The
combined effective rate] shall be –
(a) where
the employer has received a copy of a notice issued by the Comptroller under
Article 41CC specifying a rate applicable on the day the deduction is
made, the rate so specified;
[(b) where
the employer has not received a copy of such a notice –
(i) for deductions made in
the years 2015 to 2019 inclusive, 21%,
(ii) for deductions made in
the year 2020 and ensuing years, 22%.]
(3) When
making a deduction under paragraph (1), an employer shall give the
employee written notice of the amount of the deduction and [the combined
effective rate] applied to the deduction.
(4) An
employer shall maintain a record of the amount of tax deducted and [the
combined effective rate] applied to the deduction in respect of each of his or
her employees.
(5) Subject
to paragraph (5AA), an employer shall, no later than 15 days after
the end of each month, remit to the Comptroller an amount equal to the
aggregate of the amounts required to be deducted under paragraph (1)
during the month in respect of each of his or her employees.
(5AA) Provided
that the conditions in paragraph (5AB) are met, in the case of an employer
which is a company, the employer may, instead of complying with
paragraph (5), remit to the Comptroller no later than midnight on the
15th day after the end of each year, an amount equal to the aggregate of
the amounts required to be deducted under paragraph (1) during the year in
respect of each of his or her employees.
(5AB) Those
conditions are that –
(a) an
application is made in writing to the Comptroller by a director of the company
for paragraph (5AA) to apply;
(b) the
director who makes the application owns at least 25% of the ordinary share
capital of the company; and
(c) the
Comptroller agrees to the application.
(5A) If,
in respect of an amount required to be remitted under paragraph (5) or
(5AA) –
(a) the
Comptroller has not received a return from the employer under Article 20
or the information included in the return is not complete; and
(b) no
amount is remitted to the Comptroller or the Comptroller is not satisfied the
amount remitted is the amount required to be deducted under paragraph (1),
[the Comptroller –
(i) may to the best of the
Comptroller’s information and judgement, make an estimate of the amount of tax
required to be remitted under paragraph (5) or (5AA) and calculate, by
reference to that estimate, the corresponding amount of LTC contribution
required to be remitted, and
(ii) shall serve on the
employer a notice requiring an amount that is the sum of those amounts to be
paid and containing the information described in paragraph (5B).]
(5B) That
information is –
(a) the
amount required to be paid;
(b) the
latest date on which an appeal against [the estimate of the amount of tax]
required to be paid may be made; and
(c) the
date by which [the amount required to be paid,] failing the making of an
appeal, is required to be paid, such date being no earlier than 15 days
from the date of the notice.
(5C) If,
at any time, the Comptroller discovers, by reason of receiving a return from
the employer under Article 20 or for any other reason, that the amount of
the estimate specified in a notice under paragraph (5A) is incorrect, the
Comptroller may cancel the notice and serve on the employer a further notice
under paragraph (5A) requiring a revised amount to be paid and containing
the information described in paragraph (5B).
(5D) An
employer shall comply with any notice served on the employer under
paragraph (5A).
(5E) Part 6
shall apply, with the necessary modifications, to an appeal against an estimate
under paragraph (5A) as it applies to an appeal against an assessment and
as if for the number “40” in Article 27(1) there were substituted the
number “15”.
(6) An
employer shall, no later than the end of January following a year of
assessment, give each of the persons in his or her employment at the end of
that year a written summary of the deductions made pursuant to this Article
from the employee’s earnings for that year.
(7) Where
an employee ceases employment before the end of a year of assessment, the
employer shall, upon the employment ceasing give the employee a written summary
of the deductions made pursuant to this Article from the employee’s earnings
for that year.
(8) An
employer shall not be required to deduct [tax and an LTC contribution and remit
them] to the Comptroller in the case of an employee who, on the
31st December in the year in which the deduction would otherwise be made,
will be under the upper limit of compulsory school age as defined by
Article 2 of the Education
(Jersey) Law 1999[14].
(9) An
employer who fails to comply with paragraph (5) or (5AA) shall be guilty
of an offence and liable to a fine.
(10) Where
the secretary or another officer of a body corporate or any other person
engaged in the management of the body corporate is deemed to be the employer by
virtue of Article A15(6) or (7), the body corporate, as well as that
person, shall be liable to a fine under paragraph (9) of this Article.
(11) The
imposition of a fine under paragraph (9)(b) shall not discharge the
employer’s liability to remit the monies required under paragraph (5) or
(5AA).
(12) Where
an employee proves, to the satisfaction of the Comptroller, that a deduction
has been made from the employee’s earnings, in accordance with
paragraph (1), the employee shall be entitled to have the deduction
treated as a payment of tax [and LTC contribution] by the employee,
notwithstanding that the employer has failed to remit the amount to the
Comptroller in accordance with paragraph (5) or (5AA).
(13) An
employer who fails to make a deduction in accordance with paragraph (1)
but who remits to the Comptroller the amount required by paragraph (5) or
(5AA) in respect of an employee may recover that amount from the employee as a
civil debt.
(14) Deductions
shall be made, in accordance with this Article, from the earnings of a civil
partner B notwithstanding that, by virtue of Article 122B(1), his or her income is deemed to be that of his or her civil
partner A.
(14A) Deductions
shall be made, in accordance with this Article, from the earnings of a civil
partner B notwithstanding that, by virtue of Article 122B(1), his or her income is deemed to be that of his or her
civil partner A.
(15) An
agreement shall be void to the extent that it provides for the payment of
earnings without deduction of tax in contravention of this Article.
41E Duty of building contractor
to deduct and account for tax [and LTC contributions]
(1) A
building contractor shall, in accordance with this Article, deduct tax [and an
LTC contribution] at the specified rate from payments made to a sub-contractor
or to a person nominated by the sub-contractor for the purpose.
(2) Paragraph (1)
shall not apply at any time when –
(a) the
sub-contractor has produced an exemption certificate to the building
contractor; and
(b) the
LTC exemption certificate is in force at the time the payment is made.
[(2A) A
building contractor shall not deduct an LTC contribution under
paragraph (1) at any time when –
(a) the
sub-contractor has produced an LTC exemption certificate to the building
contractor; and
(b) the
LTC exemption certificate is in force at the time the payment is made.
(2B) The
Comptroller shall issue an LTC exemption certificate to a sub-contractor –
(a) upon
the application of the sub-contractor; and
(b) if,
in the year in which the application is made, the sub-contractor has paid, in
the aggregate, an LTC contribution for the year that is equal to or exceeds the
LTC percentage of the upper annual income limit for the year, referred to in
paragraph 3 of Schedule 1C to the Social Security (Jersey) Law 1974[15].
(2C) An
LTC exemption certificate shall remain in force from the day it is issued until
the end of the year in which it is issued.]
(3) When
making a deduction under paragraph (1) a building contractor shall give
the sub-contractor or the person nominated by the sub-contractor to receive the
payment written notice of the amount of the deduction.
(4) A
building contractor shall maintain a record of the amount of tax [and LTC
contribution] deducted in respect of each of his or her sub-contractors.
(5) A
building contractor shall, no later than 15 days after the end of each
month, remit to the Comptroller an amount equal to the aggregate of the amounts
required to be deducted under paragraph (1) during the month in respect of
each of his or her sub-contractors.
(5A) If,
in respect of an amount required to be remitted under paragraph (5) –
(a) the
Comptroller has not received a return from the building contractor under
Article 20A or the information included in the return is not complete; and
(b) no
amount is remitted to the Comptroller or the Comptroller is not satisfied the
amount remitted is the amount required to be deducted under paragraph (1),
[the Comptroller –
(i) may, to the best of the
Comptroller’s information and judgement, make an estimate of the amount
required to be remitted under paragraph (5) and calculate, by reference to
that estimate, the corresponding amount of LTC contribution required to be
remitted, and
(ii) shall serve on the
building contractor a notice requiring an amount that is the sum of those
amounts to be paid and containing the information described in
paragraph (5B).]
(5B) That
information is –
(a) the
amount required to be paid;
(b) the
latest date on which an appeal against [the estimate of the amount of tax]
required to be paid may be made; and
(c) the
date by which [the amount required to be paid,] failing the making of an
appeal, is required to be paid, such date being no earlier than 15 days
from the date of the notice.
(5C) If,
at any time, the Comptroller discovers, by reason of receiving a return from
the building contractor under Article 20A or for any other reason, that
the amount of the estimate specified in a notice under paragraph (5A) is
incorrect, the Comptroller may cancel the notice and serve on the building
contractor a further notice under paragraph (5A) requiring a revised
amount to be paid and containing the information described in paragraph (5B).
(5D) A
building contractor shall comply with any notice served on the building
contractor under paragraph (5A).
(5E) Part 6
shall apply, with the necessary modifications, to an appeal against an estimate
under paragraph (5A) as it applies to an appeal against an assessment and
as if for the number “40” in Article 27(1) there were substituted the
number “15”.
(6) Where,
before the end of a year of assessment, a person ceases to be a sub-contractor
of a building contractor, the building contractor shall give the sub-contractor
a written summary of the total deductions made, pursuant to this Article,
during that year, from the payments made under the contract to the
sub-contractor or person nominated by the sub-contractor for the purpose.
(7) A
building contractor shall, no later than the end of January following a year of
assessment, give each person who is, at the end of the year, his or her
sub-contractor, a written summary of the total deductions made, pursuant to
this Article, during that year, from the payments made under the contract to
the sub-contractor or person nominated by the sub-contractor for the purpose.
(8) A
building contractor who fails to comply with paragraph (5) shall be guilty
of an offence and liable to a fine.
(9) Where
the secretary or another officer of a body corporate or any other person
engaged in the management of the body corporate is deemed to be the building
contractor by virtue of Article A15(4) or (5), the body corporate, as
well as that person, shall be liable to a fine under paragraph (8) of this
Article.
(10) The
imposition of a fine under paragraph (8)(b) shall not discharge the
building contractor’s liability to remit the monies required by
paragraph (5).
(11) Where
a sub-contractor proves, to the satisfaction of the Comptroller, that a
deduction has been made in accordance with paragraph (1) from payments
made to the sub-contractor or to a person nominated by the sub-contractor for
the purpose, the sub-contractor shall be entitled to have the deduction treated
as a payment of tax [and LTC contribution] by the sub-contractor,
notwithstanding that the building contractor has failed to remit the amount to
the Comptroller in accordance with paragraph (5).
(12) A
building contractor who fails to make a deduction in accordance with
paragraph (1) but who remits to the Comptroller the amount required by
paragraph (5) may recover that amount from the sub-contractor as a civil
debt.
(13) A
contract shall be void to the extent that it provides for payments to be made
without deduction of tax, in contravention of this Article.
(14) Where
a sub-contractor has arrears of tax for any year of assessment, the fact that
deductions are made in accordance with this Article from payments made to the
sub-contractor or to a person nominated by the sub-contractor for the purpose
shall not prevent the Comptroller pursing the recovery of those arrears by any
means.
(15) For
the purposes of this Article, the “specified rate” is –
(a) for
deductions made in the years 2006 and 2007, 15%;
[(b) for
deductions made in the years 2008 to 2014 inclusive, 20%;
(c) for
deductions made in the years 2015 to 2019 inclusive, 21% being
the sum of a rate of 20% for the purposes of deductions of tax and a rate
of 1% for the purposes of deductions of LTC contributions;
(d) for
deductions made in the year 2020 and ensuing years, 22% being the sum
of a rate of 20% for the purposes of deductions of tax and a rate
of 2% for the purposes of deductions of LTC contributions.]”.