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Guernsey Tax

Changes to Guernsey tax and Social Security

Guernsey has always had three categories for social security contributions. Changes are happening for two of them. The basis period for those who are considered self-employed and non-employed is changing from 2021.

This has been planned by the States for some time and seeks to move both groups onto the much more efficient ‘current year’ basis, alongside the third category ‘employees’ that always have been on such a basis.

If you have been in one of these two categories you are no doubt familiar with Guernsey's rather old-fashioned system of charging social security on the basis of income from 2 years ago; for example, 2020 is currently assessed on 2018 income levels.

This had involved initial years being assessed twice alongside complicated ceasing rules, all of which will now thankfully disappear as matters move forward on what we believe is a sensible change that has taken too long to come about.
Meanwhile, the Revenue Service are also allowing these two categories to choose their basis for 2020. You can elect that year's actual income levels or remain based on 2018. Those who are suffering a reduction in income this year will therefore be better off and we recommend contacting the Service to make that election.

You may also be receiving letters from the Service concerning the level of estimated contributions they have made for 2021; which again may need to be appealed if too high. We would be happy to help with these to ensure you are not paying too much.

Independent taxation

Whilst writing, we would also like to make couples aware of the next "far reaching" change in Guernsey taxation. This in our view again furthers the modernisation of our old system - the forthcoming "independent taxation". This was passed by the States this year to go-ahead and is scheduled for 2022, however it may become delayed until 2023. This, together with the above Social Security changes is coincided to help the introduction of a new tax IT system.

2019 Guernsey tax returns deadline

Finally, as you may be aware the deadline for the 2019 Guernsey tax returns has been extended to February 2021. If you have not already provided the information to enable us to complete your return please forward it to us as soon as possible.