In the UK – and most of the rest of the world – the majority of people don’t do tax returns.
Self-employed people and business owners complete a self-assessment, as do some people with complicated financial affairs, but the average person with an ordinary job doesn’t need to.
By contrast, in Guernsey almost everyone has to.
So, is it any wonder the island is currently drowning in a huge backlog of at least 20,000 unprocessed tax returns?
Now, backbench Deputy Garry Collins says the best way to improve things is to move closer to the system used in countries like the UK, and stop making ordinary people fill out the forms entirely.
In an exclusive and wide-ranging interview, he told Express the tax proposals from Policy and Resources (P&R) were overcomplicated – and Guernsey needed to “get back to simple”.
Deputy Collins said when it came to “doing tax forms the only way we’re going to catch up is to stop doing it”.
“My proposal is exactly that – you wouldn’t do an income tax form at all.”
The hidden cost of ‘sticky tape’ systems
The push for a total administrative overhaul comes against a background of growing political frustration over government spending – especially on failed local IT systems.
In recent years, the States has spent £42m on glitch-ridden online platforms like MyGov, as well as over £100m more on the failed Agilisys contract.
Yet, the local income tax office remains bogged down by delays, leaving residents waiting years for refunds and stuck with incorrect assessments.
“Our systems are really being held together at the moment with sticky tape and plasters,” Deputy Collins warned.
“Why do we need all these systems, when actually you could do something completely different?”
Who pays income tax in Guernsey?
Data obtained by Deputy Collins reveals that an overwhelming 79% of the island’s personal income tax is already collected directly through existing employer payroll systems – through the ETI scheme – with a further 8% from self-employed people.
He argued that the massive infrastructure of the tax office exists purely to chase the remaining 13% of revenue scattered across pensions, bank interest, and rental income.
| Income source | Share of total tax paid |
|---|---|
| Employment (ETI) | 79% |
| Self-Employed | 8% |
| Pensions | 9% |
| Bank Interest | 3% |
| Rental Property (Rents) | 1% |
Source: Estimates provided by P&R following Deputy Collins’ Rule 14 parliamentary question
‘Plan G’
To replace the missing 13% of the tax base and eliminate annual coding notices and tax forms, Deputy Collins has drawn up a detailed alternative masterplan labeled ‘Plan G’ – with ‘G’ standing for Guernsey (as well as being the next available letter).
What is ‘Plan G’
1. A universal tax-free allowance
The plan scraps complex personal tax codes.
Instead, it introduces a simple, universal lower earnings allowance of £400 a week (£20,800 a year).
This would immediately lift the island’s tax-free threshold from its current level of £15,200, providing targeted relief to lower-paid workers.
2. Four automated pay-slip funds
Income tax and social security would be consolidated into a single ‘Employment Tax’ deducted straight from payslips.
This money would be cleanly split into four transparent, ring-fenced funds based on a strict matching principle:
- States Pension Fund: Set at 3.75% for employees and employers.
- Employment & Support Fund: Set at 4.25% for employees and employers.
- Health & Children’s Services Fund: Set at 16% for employees and self-employed.
- Public Administration Fund: Set at 4% for employees and self-employed.
3. A flat fee for landlords
Deputy Collins argues the current system means landlords with jobs often pay tax on rental income, while those without other taxable earnings may pay none at all because of their personal allowance.
Instead of requiring landlords to submit complex annual accounting expenses to tax officers, a new private Landlord Register would be launched.
Landlords would simply pay a flat, predictable fee of £500 per quarter, per rental unit, collected automatically via direct debit.
Deputy Collins believes this will actually help lower high rents: “Currently, some landlords pay 20% – or £5,208 on average – in tax [based on an average rent].
“By removing the rental income tax completely, they will actually pay £3,208 less per year.
“If they are nice, they will freeze or reduce your rent as costs go down.”
4. Scrapping tax on bank interest
The plan abolishes tax on standard bank interest entirely, which currently generates about £10 million but acts as a heavy penalty on first-time buyers saving for deposits and retirees living off savings.
Deputy Collins called the current process a “waste of government time”, costing millions in administrative strain just to chase an average of £167 per person.
5. Doubling property tax (TRP)
To bridge any remaining financial gaps without introducing a consumption tax, property tax (TRP) would be systematically increased over a five-year period to hit a £70 million target.
Higher-value, open-market luxury properties would absorb the heaviest increases.
For an average home, TRP bills would rise from roughly £200 to £400 a year—amounting to an extra £16.67 a month.
What about previous years?
Under Deputy Collins’ proposals, tax returns from previous years would still be processed, meaning anyone who was entitled to a rebate would still get it.
However, going forward the system would be hugely simplified, allowing Revenue Services to clear the historic backlog and reducing the number of civil servants there longer term.
Automated tax returns
While Deputy Collins’ proposals go much further than the UK system, Express has previously asked Deputy Lindsay de Sausmarez why ordinary employees in Guernsey have to fill in a tax return at all.
When asked why local supermarket workers were subjected to the annual paperwork loop while UK payroll employees were exempt, the Policy and Resources (P&R) President deflected the question.
Appearing to confuse the scenario with Guernsey’s current setup, she told Express: “I think what you’re talking about is automatic assessments – and that already happens.”
“I know it feels like it’s a tax reform thing, but it’s not. That’s just business‑as‑usual Revenue Services, so it’s not part of this package.”
‘They’ve turned over no stones’
While ‘Plan G’ provides a possible alternative to P&R’s highly unpopular package of reforms – which includes 3% Goods and Services Tax (GST) – Deputy Collins stressed that the island cannot rush into massive tax changes without first reviewing spending.
Along with Deputy Haley Camp, he has submitted an amendment to scrap P&R’s current plans and establish an independent ‘Appropriations Committee’ to force genuine spending cuts first.
He argues senior politicians have completely failed to do the hard work on the £20 million in savings they have banked in their budget – and to raise taxes before trying to cut spending would be irresponsible.
He said: “If they want to find efficiencies and savings, you have to turn over every stone.
“They’ve turned over no stones.”
