Guernsey Press

Dyke bids to save 'middle Guernsey' from tax rises

Individuals with income between £80,000 and £90,000 a year will escape an additional tax rise next year if two deputies succeed with a late Budget amendment.

Deputy John Dyke says the proposed tax changes will 'cut too deeply into middle Guernsey'. (Picture by Sophie Rabey, 32686097)

Since 2017, higher earners have faced reductions in the personal allowance – the amount of income which can be received annually free of tax.

This withdrawal of the personal allowance initially affected only taxpayers with income of nearly £140,000 a year. But the threshold is now £90,000 and Policy & Resources is proposing to drop it to £80,000 in 2024.

The Guernsey Party’s two remaining deputies, John Dyke and Simon Vermeulen, believe the policy is now affecting ‘middle Guernsey’ and want to see no further reductions in the threshold.

‘The figure has been cut and cut and also more people are being dragged into it because of high rates of inflation in recent years. Those two things have greatly expanded the number of people losing their personal allowance and paying more tax,’ said Deputy Dyke.

‘I wanted to do at least something about this before it starts to cut too deeply into middle Guernsey.

‘It was originally aimed at very high earners – people who would now be earning about £200,000 a year if you added inflation since 2017. But it has since been cut lower and lower because I’m afraid these people are seen as an easy hit. It really should be pushed back up but I didn’t think I could get that through. My amendment would at least put a brake on the downward movement of this policy.’

The amendment was published yesterday, having been submitted after the normal deadline, and will only be debated if the States agrees to suspend the rules of procedure at its Budget meeting next week.

If the debate goes ahead and the amendment is approved by the Assembly, the States Treasury would lose about £1.5m. of budgeted tax income next year. The maximum an individual will pay extra as a result is £400. The move would bring 1,000 taxpayers into the position where they lose personal allowances.

The committee has admitted that it had considered dropping the limit below £80,000. Deputy Dyke said the senior committee was ‘pretty non-committal’ when he discussed his idea with them.