Government's revision of social security proposals in GST+ welcomed by Chamber
- Guernsey Chamber of Commerce welcomes Government's revised approach to social security changes within GST+ package
- Employer social security rates to rise to 7.6 per cent rather than originally proposed 8 per cent, it says, with more gradual phasing
- Social security for employees and self-employed will apply only on earned income, with aligned treatment between both groups
- Chamber secured key business needs including transparency, manageable phasing, fairness and simplicity in implementation
- Changes come alongside GST, secondary pensions, minimum wage changes and wider tax reform landing simultaneously
The Guernsey Chamber of Commerce has welcomed the Government's revised approach to social security changes forming part of the GST+ package, following sustained engagement and advocacy on behalf of the island's business community.
The proposals represent a meaningful response to the concerns Chamber members raised and reflect the value of constructive dialogue between business and government, the organisation said on Thursday.
It comes on the same day that Policy & Resources said it was developing a "blended package of tax measures", but stopped short of saying exactly what ahead of its States report being published.
The Chamber has been an active participant in the GST+ planning workstream alongside government, working in partnership to ensure that the package is designed in a way that meets the needs of the community and is workable for Guernsey businesses.
Throughout this process, Chamber representatives pressed government on three key asks: transparency on changes, a more gradual phasing of any increases, and a simplified and fair alignment between the treatment of employed and self-employed individuals.
Nick Mann
Chamber members consistently stressed the importance of a fair and capped employer cost, alongside practical implementation that would not create unnecessary payroll complexity or undermine Guernsey's competitiveness.
Diane de Garis, Chamber treasurer and lead on this workstream, said: "Businesses were clear: they accept the need for change, but they needed phasing that was manageable, rates that were fair, certainty around the overall employer burden, and a system that treated employed and self-employed workers consistently. The revisions being discussed go a significant way towards delivering exactly that. This is what effective partnership between business and government looks like."
The key outcomes expected to be seen in revised proposals include Government proposing more gradual phasing of increases, with employer social security rates rising to 7.6 per cent rather than the originally proposed 8 per cent.
Social security for employees and self-employed individuals will now apply only on earned income, mitigating the wider impact on workers. The treatment of employed and self-employed individuals will be aligned, with an income tax deduction introduced for self-employed contributions to ensure fairness.
To balance the overall package, adjustments will be made to the social security allowance and the threshold for the 20 per cent income tax rate.
The Chamber had called on government to address key business needs including transparency, with a clear breakdown of the £17 million in employer social security changes, with full modelling of the impact on businesses of different sizes, and clarity on how income broadening measures interact with the headline figures.
Nick Mann
Policy & Resources President Lindsay de Sausmarez said: 'There is currently an understandable assumption that we will simply recommend the implementation of the original GST-plus package.
"Having looked at a range of different variations and approaches, though, we are developing what we believe is a more balanced blend of measures that draws from each of the different workstreams and responds proportionately and pragmatically to the issues helpfully raised by the community."
As well as GST, those workstreams included changes to corporate tax, although that sub-committee recommended no major alterations, service reductions to reduce spending and vehicle tax.
P&R's full proposals will be published on 8 June for debate in July.
Q&A
Q: What will the revised employer social security rate be?
A: The revised employer social security rate will rise to 7.6 per cent, down from the originally proposed 8 per cent, with more gradual phasing of increases.
Q: What were the Chamber's three key asks to government?
A: The Chamber pressed government on transparency on changes, a more gradual phasing of any increases, and a simplified and fair alignment between the treatment of employed and self-employed individuals.
Q: How will social security treatment differ for employed and self-employed workers?
A: The treatment will be aligned, with social security applying only on earned income for both groups, and an income tax deduction introduced for self-employed contributions to ensure fairness.
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