Income tax rise plans for £80k+ earners scrapped

Proposals to increase income tax on Guernsey have been rejected

Proposals to increase income tax for people earning more than £80,000 in Guernsey have been rejected by deputies.

Deputies John Gollop and Aidan Matthews put forward the idea of a 22% rate for “middle to high earners” in an effort to raise about £10m a year for States finances.

The Guernsey International Business Association (GIBA) had expressed its concerns about the plan, warning it would risk making Guernsey uncompetitive.

Deputy Chief Minister Mark Helyar said the “kneejerk” attempt to increase income tax could have had a “very damaging impact”.

The proposal, to amend the 2024 budget, would have seen Guernsey’s Policy and Resources Committee (P&R) investigate further increases to income tax in 2025.

It was rejected by 29 votes to nine after a brief debate in the assembly.

Those behind the amendment to the budget said it was disappointing the proposals were defeated.

Mr Matthews said “a tuppence on income tax would have a lot of popular support, and it would be worth going away and doing some consultation on what people would think".

He said: "There’s this view that 20% income tax is sacrosanct, you can’t move it.

"Deputy Lyndon Trott has made the point that people look at things in the round; social security, other taxes; not just that 20% tax rate.”

No-confidence vote

An attempt to debate a motion of no confidence in P&R was also rejected.

Deputy Carl Meerveld put forward the idea in an effort to see it discussed before the budget for 2024.

But his proposal was voted down by 24 votes to 12.

The motion of no confidence, submitted by Deputy Charles Parkinson and six other deputies, is now likely to be debated at the States meeting starting on 22 November.