Chamber has called a briefing for next week, having been dissatisfied by responses from the States about what it sees as a new £17m. burden being levied on employers. It wants businesses to engage with the proposals before any decisions are made.
GST-plus is not formally on the table for the States at the moment, though it is due to address public finances before the summer recess.
If it returns in the form as agreed in 2024 by the previous States, Chamber said employers would face a ‘significant and ongoing increase’ in their social security contributions on behalf of staff.
‘We support a sustainable social security system and fair treatment of income,’ said Chamber director Diane de Garis.
‘But what is being proposed places a significant ongoing burden on Guernsey employers, with insufficient transparency about what is new versus what was already planned.
'Businesses need predictability. This package, as currently structured, does not provide it.’
The business group said that the reforms are presented by the States as delivering a net £5m. of extra income to the exchequer, but that is broken down into £12m. of reductions for lower earners and £17m. of extra contributions, mostly from employers.
Their contribution rates are set to rise over the next few years from 7.1% to 8%, with no allowances offered – unlike for employees and the self-employed.
Chamber also claimed that agreed rate increases are being accelerated and compounded, and payroll systems will need to change to cope with the proposals.
It has called on the States to provide a clear breakdown of the £17m. increase in contributions; transparency over how the proposals have developed; predictable and manageable phasing of any changes; and a full impact assessment on what it will mean for local businesses.
It raised concerns publicly last month having said it had struggled to get clear data from the States about future contribution rates and allowances.
It said it needed such information to be able to respond meaningfully.
The GST-plus package has previously outlined social security reform as a move to raise more income while reducing most people’s contributions with the introduction of a contribution-free allowance pitched around £15,200 a year, following the income tax allowance model.
Everyone would also be subject to contributions on their worldwide income, not just their workplace earnings.
Chamber is hosting a member briefing event from 8am on Thursday 21 May at Camilla’s Cafe in Rue du Pre, where businesses can hear a full breakdown of the proposals and put their questions directly to Chamber and government representatives. Register at guernseychamber.com/events
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