Chamber raises concerns over social security reforms in GST+ package
- Guernsey Chamber of Commerce raises concerns over social security reforms in Government's GST+ tax package
- Reforms show net £5m but comprise £17m additional contributions offset by £12m reductions, majority falling on employers
- Employer contribution rates to rise from 7.1% to 8.0%, plus 2.5% on income between Upper Earnings Limit and £250k
- Chamber calls for clear breakdown of costs, transparency on new versus planned measures, and full business impact assessment
- Member briefing event scheduled for 21st May at Camilla's Café to discuss proposals with Government representatives
The Guernsey Chamber of Commerce has issued a formal member briefing expressing concerns about proposed social security reforms within the Government's GST+ tax reform package, and is urging local businesses to engage with the proposals before decisions are finalised.
The reforms, which the Government has presented as delivering a net £5 million, comprise £12 million of reductions offset against £17 million in additional contributions, with the majority of the increase falling directly on employers.
Under the proposed changes, one of the options to be debated this summer, employers face a significant and ongoing increase in their social security contribution obligations. Employer contribution rates are set to rise from 7.1 per cent in 2026 to 8.0 per cent under the tax reform proposals, with an additional 2.5 per cent levy on income between the Upper Earnings Limit and £250,000.
Unlike employees and the self-employed, no allowances apply to employers under the proposals. The existing agreed rate increases are being accelerated and compounded with additional levies, whilst changes to payroll systems will be required despite no system currently existing that can deliver the proposed structure.
Chamber Director Diane de Garis said: "We support a sustainable Social Security system and fair treatment of income. 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 Chamber is calling on Government to provide a clear breakdown of the £17 million contribution increase, transparency on what was already agreed versus what represents new measures, predictable and manageable phasing of any changes, and a full impact assessment on Guernsey businesses.
The Guernsey Chamber of Commerce will host a member briefing event on Thursday 21st May at 8:00am at Camilla's Café, where businesses can hear a full breakdown of the proposals and put questions directly to Chamber and Government representatives. Registration is available at guernseychamber.com/events.
Q&A
Q: How much will the proposed social security reforms increase employer contributions?
A: The reforms involve £17 million in additional contributions offset by £12 million in reductions, resulting in a net £5 million. The majority of the increase falls on employers, whose contribution rates will rise from 7.1% in 2026 to 8.0%, plus an additional 2.5% on income between the Upper Earnings Limit and £250,000.
Q: What specific concerns has the Chamber raised about the proposals?
A: The Chamber has highlighted insufficient transparency about what is new versus what was already planned, the lack of allowances for employers unlike employees and self-employed workers, acceleration and compounding of existing agreed rate increases, and the absence of payroll systems capable of delivering the proposed structure.
Q: How can businesses learn more about the proposed reforms?
A: The Guernsey Chamber of Commerce is hosting a member briefing event on Thursday 21st May at 8:00am at Camilla's Café, where businesses can hear a full breakdown of the proposals and put questions directly to Chamber and Government representatives. Registration is available at guernseychamber.com/events.
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