Alderney told it will have to adopt GST – like it or not

Alderney States member Jeannie Cameron had claimed in an article in the Alderney Journal that although the island may be part of the Bailiwick of Guernsey, when it came to taxation, the choice belonged to Alderney.

‘The modern relationship between Alderney and Guernsey is defined by the 1948 Agreement, which sets out how responsibilities and revenues would be shared,’ she claimed.

Ms Cameron, a relatively new member of the island's government, has argued that Alderney retains significant autonomy over certain services, particularly tax.

'On taxation, the agreement is clear – all Guernsey scales of taxation... will, with such minor adjustments and exceptions as may be agreed between Alderney and Guernsey, apply in Alderney.

'This clause gives Alderney the right to agree or reject new Guernsey taxes, including a potential GST. That power to make exceptions has formed part of Alderney’s constitutional framework for over 75 years.’

However, in response, Guernsey’s Policy & Resources committee said it was important to clarify that the 1948 Agreement was clear that, as a general principle, all scales of taxation which are levied in Guernsey automatically apply in Alderney.

‘Any exemptions can be specified by Guernsey ordinance approved by the States of Deliberation, but are not at the discretion of the States of Alderney,’ said P&R president Lindsay de Sausmarez on behalf of the committee.

‘Under this framework, it is beyond doubt that Alderney cannot unilaterally depart from this general principle, which ensures that, for the purposes of taxation (and unless otherwise agreed by Guernsey), both islands are generally treated as one.’

A group of Guernsey civil servants travelled to Alderney last week and gave a presentation to 30 Alderney Chamber of Commerce members about what the potential introduction of GST could mean for the island. None of the Alderney people spoke in favour of the scheme.

Alderney Chamber of Commerce president Andrew Eggleston said that in a recent survey 100% of their members were against any form of GST.

However he doubted it would be possible for Alderney to opt out of GST.

‘It might be legally possible, but would the ramifications from it be beneficial?’ he said.

‘We’re all on the same side. We want to make sure our islands work in a proper financial way for the future.’

Despite being against GST, he said there was a realisation within his members that the Bailiwick needed a higher tax take.

‘In our survey a number of ideas were mooted,’ he said.

‘One is increase of income tax, maybe 1% or 2% with higher allowances for the lower paid.’

He added there was also support for inheritance tax and a new company tax regime to replace zero-10.

‘There is so much money within the bank accounts of so many businesses within the Bailiwick, they do not pay tax on. One only pays tax on the distribution, in other words, salaries. However Guernsey and Jersey would have to stick together. ‘

Mr Eggleston also mentioned that a number of members felt that before changes to the tax system were made, Guernsey should get its own tax office in order

‘The Guernsey income tax authority is so many years behind,’ he said.

‘If they could get their own house in order first and see how much money that would bring in, that would be good.’

Both Alderney representatives to the States had spoken in favour of the introduction of the tax during the GST debate.

Alex Snowdon told the Guernsey Press Politics Podcast earlier this year that he would be very concerned if the GST package was taken off the table.

‘We do need to get real with this,’ he said.

‘From Alderney’s point of view, I would not like to see major cuts to public services, and that could happen potentially unless there is another tax.’