Over 3,000 lower income households worse off under tax review proposals

Press release issued on Thursday 19 March 2015

In early March the Guernsey Community Foundation wrote to all States members calling for their support in having the whole of the Personal Tax, Pensions and Benefits Review debated as a Green Paper to allow for proper time for consultation and research into the impact on vulnerable and less well-off members of the community in Guernsey and Alderney. The decision to debate part of the Review as a Green paper is welcome recognition of those concerns, though it should be recognised that those who are less well off may also have pensions and mortgages and share tax allowances so Module 3 (universal benefits) is not the only part of the Review that may adversely affect them.

The Foundation has now digested the Review further and is providing an initial analysis of the data within it to States Members highlighting that, under the proposals, over 3,000 lower income households could find themselves worse off. (Please see attached report and for sources of data.)

The intention of the Joint Board is that, overall, the proposals are ‘broadly revenue neutral’.  The total amount of revenue raised remains the same, but it is more sustainably distributed between direct and indirect taxes.

However Section 7 of the States report contains references to the percentage of households within each income group that gain from the Review’s proposals and the percentage that lose. When these percentages are converted to number of households and shown graphically, the potential impact on households with lower incomes is revealed.

30% of households with a combined net income (after tax and benefits) of £22,000 a year would be worse off with 39% of households with an income of between £22,000 and £33,000 also losing out.

This equates to 1,600 households with an income below £22,000 a year being worse off, plus a further 2,100 households with an income between £22,000 and £33,000.

Following the debate, a period of consultation and further research would enable the full impact of the proposals to be researched and the means of reducing or removing the impact upon less well-off and vulnerable groups determined. The Foundation is fully committing to playing its part in continuing to work with the States, business and community groups to address the concerns which it acknowledges require significant action in the future.  Indeed, it would like to repeat its previous offer to commission research in this area - at no cost to the States.


Issued by Sarah Duguid, Guernsey Community Foundation.  Tel 748056, email sarah@foundation.gg

Note to Editors

1.       Opportunities for interview

If you wish to speak to Wayne Bulpitt, Chair, GCF on this press release please contact Sarah Duguid at the Guernsey Community Foundation on 748056 to arrange interviews or alternatively contact Wayne direct on 711822/07781 103708.

2.       About the Guernsey Community Foundation

The Guernsey Community Foundation has the overriding objective of ‘promoting effective philanthropy’ where philanthropy is defined as the giving of money, time and ideas.

The Foundation is working to build capacity in the voluntary sector by supporting local charities and voluntary organisations as they look to develop their services and to grow. It is actively encouraging and nurturing effective partnerships within the voluntary sector itself and between it, the States of Guernsey and the business sector.

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