Employment Taxes
A new life in the channel?
Multinational companies with employees based in the Channel Islands and new businesses relocating to the respective Islands will have local payroll tax compliance and business licence considerations that need to be appropriately managed. With the recent trend towards remote working there are also unexpected compliance obligations for organisations.
Payroll functions of global organisations are often managed centrally from a home jurisdiction. Employers sending employees to Jersey or Guernsey on a temporary basis or remote workers spending time working on one of the Islands may not always be aware of the tax and social security complexities of doing so, including permanent establishment risks.
Compliance Services - Payroll documentation/returns preparation
We ensure all employer obligations are dealt with correctly and on a timely basis. This includes preparation of employee monthly payslips; year-end statements; preparation and submission of income tax and social security returns; and benefit in kind declarations in both Jersey and Guernsey.
Consultancy Services - Bespoke advice
We also provide bespoke income tax and social security advice for employees transferring into and out of Jersey/Guernsey. We ensure that assignments are set up in the most tax efficient manner and you and your assignees will be fully aware of the tax and social security implications resulting from them moving jurisdictions.
Where assignees are provided with benefits such as accommodation and reimbursement of relocation costs, we can help you understand the tax impact, which benefits receive an exemption and the payroll/disclosure requirements.
Advice to offshore assignees
It is also essential for employees to be fully aware of their personal obligations in both home and host jurisdictions and to understand these from the outset.
We can assist your assignees by providing them with entry and exit meetings where we can give face to face advice specific to their circumstances. Complexities may arise where employees receive income from their home jurisdiction, which remains taxable there whilst working in Jersey/ Guernsey. We can advise on how this is treated in the respective Islands and how they can mitigate any potential double taxation.
“Help desk” function
We have extensive experience with running a payroll “Help desk” bureau for employees. Our Help desk function provides access to a specialist adviser to ensure that any queries they have can be resolved quickly with minimum disruption to employer and employee
"I have been very impressed with the level of service and expertise that Baker Tilly Channel Islands have given us over the course of our relationship to date. They have provided us with invaluable advice and guidance to ensure compliance with our regulatory and legal responsibilities."
Share schemes can provide a highly attractive way to retain and motivate employees
The tax and social security treatment for share schemes in Jersey and Guernsey are different from those in the UK. Understanding the implications for each proposed new share scheme is therefore important to know from the outset at a business level and to present to the employees who are eligible to participate in the respective scheme.
Each island has specific treatments depending on the nature of the scheme. Furthermore, Jersey is in the course of transitioning to new rules regarding both the income tax and social security treatment for share schemes and share awards.
It is crucial that a business looking to implement a new scheme takes appropriate advice upfront and where necessary seeks the relevant approval from the respective tax authorities.
We are experienced in reviewing share plan documentation and advising on the likely tax and social security implications for the business and the participating employees ahead of implementation. We are also in frequent negotiations with the relevant authorities to seek confirmation of the proposed treatment such that businesses have sufficient comfort they are compliant with the law.
At Baker Tilly Channel Islands, we will:
- Work pro-actively with you to identify potential payroll and business licence considerations and ensure your clients are compliant with the rules,
- Review and/ or draft share plan documentation, provide the necessary tax and social security analysis and seek tax authority approval such that you have the necessary comfort ahead of a plan launch,
- Provide direct access to senior management throughout our engagement; and
- Combine our local expertise with specialist knowledge from tax practitioners in other firms within our global network.
