Two pieces of work on tax reform are ongoing currently – which will lead to yet another States debate on GST this summer.
This debate should lead to the deciding vote on whether we have to start paying a goods and services tax, or not.
If GST is introduced it will be as part of a new package of measures, including income tax and social security reforms known as GST+.
The ‘+’ is vitally important but a lot of the conversation around the package of measure currently approved in principle by the States is focused on the goods and services tax part of it.
A Tax Review Sub-committee which has been looking at alternatives to GST made a major announcement this week, around the decision to stop looking at changes to territorial tax as a possible alternative.
Deputy Charles Parkinson – who is a Member of the Policy & Resources Committee, and is leading the Tax Review Sub-committee – hinted that he will continue to push for territorial tax reform in the future.
“I continue to believe that corporate tax reform can play a significant role in what we ultimately recommend to the States in the summer,” he said. “There is an expectation from the public that businesses pay their fair share of tax, but this must be in a way that doesn’t affect our attractiveness as a good place to do business.
“To that end, the Sub-committee has agreed that territorial tax will not form part of our recommendations to the rest of P&R. While on a personal level I continue to believe in its merits, I accept the need for the Sub-committee to narrow the options it’s considering and now is not the right time. However, we must continue to monitor and evolve the corporate tax system in line with international developments in the years ahead.
“Once we’ve shared our findings with the rest of P&R in mid-April, it’s important that we will have the opportunity to share them with industry and the public. Transparency of this work is something that I have championed from the start, and this will be the right time to show our working.”
Work continues though to look for alternatives to GST, while work is also continuing to get ready for the introduction of GST if it comes in.
The sub-committee will be presenting its findings to P&R next month – and Deputy Gavin St. Pier, who leads on resources and is also member of the Tax Review Sub-committee, said it is important that the other workstream – to prepare for the adoption of GST+ – continues at the same time.
“At the start of this term we committed to reviewing other tax options, but we were also clear that work to prepare for the implementation of the tax package of measures agreed by the last States should continue as planned, to avoid any delay in its introduction if the States ultimately decide to include it as part of the solution to our financial challenges,” he explained.
“In carrying out this ‘twin-track’ approach on tax reform, P&R has not pre-judged either our final recommendations to the States of Deliberation, or its decision, and we are making good progress towards that final debate in the summer.
“Our focus continues to be on ensuring the States can make a fully informed set of decisions to ensure fair tax reform. We are also committed to expenditure restraint and, where possible, reduction too. Our Committee is considering options so that no stone is left unturned.”
The two work streams on the ‘twin-track’ approach are essentially – keep preparing for GST and keep looking for alternatives.
Workstream 1
Following the States vote in favouring of adopting the GST+ package of measures in November 2024, work started to prepare for the introduction of a goods and services tax, as well as changes to the income tax and social security systems that have been in place for decades.
Initially it was expected that GST+ would be introduced on 1 January 2027, however by February 2025 the work was already running around six months behind schedule.
It is now not expected to be introduced before 2028.
To enable the new tax and systems to be ready for then, civil service staff are continuing to work on getting everything in place.
“This involves continuing the necessary work to enable the timely implementation of the tax package that the previous States agreed if, and only if, the States ultimately decide to proceed with this package,” said P&R in a statement to the media issued earlier this week.
This work is continuing alongside the work to look at alternatives to GST:
Workstream 2
Workstream 2 is the work of the Tax Review Sub-committee which as explained above, is considering alternatives to the introduction of GST and the adoption of GST+.
Its work has been largely focused on corporate tax – with any potential for reforming territorial tax now off the table.
Making a decision on the potential alternatives – or the adoption of GST+ – and delivering tax reform is one of five super priorities agreed by the States for this political term.
As part of that, the next steps agreed for the Tax Review Sub-committee will see it provide P&R with its findings ‘around mid-April’.
Those findings will then be published.
The Sub-committee, which includes independent international tax policy experts, will then hold events for industry and members of the public to discuss its findings.
P&R will then publish its final proposals for tax reform in a policy letter in time for a States debate in July.
What’s already been agreed?
The preparatory work for introducing GST has continued since the then-States agreed the new tax needed to be introduced late in 2024.
The most recent decision made on GST was that it will apply to food if it is brought in, with a flat charge of 5% on everything that’s included.
A number of exemptions will be enshrined in law though – including GP appointments, emergency hospital visits, ambulance usage, and pharmaceutical supplies.
Dentists and opticians would also be exempt from charging their patients a goods and services tax if it is introduced, along with childcare provision for pre-school age children, burials and cremations and other unavoidable costs that many people face.
Public services that the States provide for free, domestic banking and insurance services, and charities’ services are all also suggested to be exempt from GST.
Transport of goods and passengers to and from and between the islands of the Bailiwick, exported services and goods, the sale of a going concern, postal services, and the ‘creation, sale, or lease of a residential dwelling’ are ‘zero rated’ under the current proposals.
The exemptions will be included within the package of measures known as ‘GST+’.
Multiple politicians and civil servants have been keen to promote the ‘+’ part of the new package over recent years.
The total package – which includes income tax and social security changes – is intended to counteract the impact of the new charges on less well off people.
The key measures are:
- Cutting the standard rate of personal income tax to 15%, with a higher rate of 20% applied to income currently above £32,400 a year. (This figure will be higher at the time of implementation as it will be increased in line with inflation)
- Introducing a social security allowance (currently £15,200 a year) to match the personal tax allowance, thereby reducing social security contributions for most people. (This figure will be higher at the time of implementation as inflation will be added)
- Implementing a 5% broad-based consumption tax on most goods and services (called GST)
- Pensions and benefits increases to compensate for the impact on prices as a result of the introduction of a consumption tax
- Introducing a new annual Essential Costs Relief Payment to support those low-income households who do not, or can not, claim income support (provisionally set at £520 a year for a single adult or £860 a year for a couple)
- New legal protections that would require the States to increase all allowances, thresholds and benefits if it ever wishes to increase the standard rate of GST
- Considering a new statutory requirement for a ’super majority’ (e.g. two-thirds) in the States of Deliberation to agree any increases in the rate of GST.
For or against GST?
While the introduction of a goods and services tax and the adoption of the GST+ package of measures was approved by 20 votes to 15 by the last States, the current States will be the ones who decide once and for all if the tax reforms happen.
Ahead of the June 2025 election, Express went through all the manifestos within the combined candidates booklet to see what the 82 candidates were saying about GST and/or the GST+ package.
As the combined candidates’ booklet went to each of the 27316 registered voters to peruse, we didn’t look at what the candidates said anywhere else on this topic.
Of the 37 candidates who were duly elected and remain in the States today Yvonne Burford, Haley Camp, Lindsey de Sausmarez, John Gollop, Sarah Hansmann-Rouxel, Rhona Humphreys, Neil Inder, Bruno Kay-Mouat, Sasha Kazantseva-Miller, Andrew Niles, George Oswald, Jayne Ozanne, Sally Rochester, Andy Sloan, Gavin St Pier, and Jennifer Strachan didn’t mention GST or GST+ explicitly in their manifestos.
Some of them did, however, mention tax, tax reforms, making tax fairer etc – if you want to read through all of the manifestos they are still available online HERE.
Of the other candidates included in the manifesto booklet who were subsequently elected to the States, 20 did mention those all important three letters or the words ‘goods and services tax’.
This cohort included a mix of current and former deputies, first time candidates, and those who have stood for election before.
Just five of these candidates outright said they will support GST+ when it comes back to the States to be introduced.
Of the first time candidates who were elected to the States in 2025, Deputy David Goy said in his manifesto that GST should not be considered until the wealthiest pay their fair share.
Deputy Tom Rylatt had said he wants “businesses and high net worth individuals (to) pay their fair share before a consumption tax (such as GST) is imposed on islanders”. It’s worth noting that Mr Rylatt was the only Forward Guernsey candidate to actually use the letters GST in his personal manifesto.
Deputy Paul Montague had said GST should only be introduced as part of a “broader, fairer tax strategy” and he wants it clearly explained to the island’s population first, while Deputy Rob Curgenven said GST “doesn’t fix the problems”.
Deputy Steve Williams said he is not in favour of GST and would support looking at other measures first.
First time candidate, Deputy David Dorrity had said that GST+ seems to be the fairest way suggested to reform the island’s finances while Deputy Munazza Malik said she is opposed to GST in isolation but will support the GST+ package.
Deputy Lee Van Katwyk had stood for election as a younger man. In his 2025 manifesto he had suggested small income tax rises or changes to corporation tax as an alternative to introducing GST.
Re-elected Deputy Mark Helyar maintained that GST is the fairer means of raising revenue and confirmed he remained supportive of it.
Re-elected Deputy Aidan Matthews said he would ‘reluctantly’ support GST+ if there are no other viable alternatives.
There were a number of candidates elected who said they oppose GST or GST+ and want to see further reforms – including to corporation tax, and other revenue raising measures – before a goods and services tax is introduced.
These include deputies Chris Blin, Tina Bury, Andy Cameron, Steve Falla, Adrian Gabriel, Marc Leadbeater, Liam McKenna, Charles Parkinson, and Simon Vermuelen.
Former deputies Garry Collins and Marc Laine were both re-elected to the States last June and both had said in their manifestos that they were opposed to GST, suggesting changes to corporate taxes, ‘boosting the economy’, and cutting spending respectively as ways to avoid a goods and services tax coming in.
Alderney’s two representatives in the States of Guernsey will also get a vote on it this summer.
Alex Snowdon previously chose ‘ne vote pas’ when the matter was decided in November 2024, while Edward Hill was elected to the States of Alderney and the States of Deliberation last year and it is as yet unclear which way he will vote.
By-election
There is currently one seat vacant in the States, which will be filled in a by-election at the end of April.
It’s likely the by-election will be seen by many as a ‘one-topic’ vote on whether candidates support or oppose GST.
The first candidate to throw their hat into the ring for the upcoming by-election was former Deputy Carl Meerveld.
He has always been very firmly and loudly anti-GST, having helped to arrange protests while he was in the States and a recent anti-GST event as a member of the public.
Stephen Rouxel was second to say he will be standing in the by-election, standing down as the President of the Chamber of Commerce to do so.
We don’t currently know his personal views on GST or GST+ but while President of the Chamber of Commerce he wrote an article saying the islands need deputies who will “deal with the fiscal reality”.
Former Deputy Andy Taylor was quoted by the Guernsey Press as saying he is considering standing for the States in the up-coming by-election having stood down last June.
None of the candidates have formally been nominated yet and there may be more.
Next steps
The extant resolution, voted on in November 2024, to introduce a goods and services tax through the GST+ package of measures remains the most recent vote on the actual introduction of GST in Guernsey and Alderney.
Work is continuing to prepare for the introduction of GST if the current States confirm that position this summer.
If it is approved then it is likely that 5% will be charged on most goods and services in Guernsey and Alderney from 2028.
