Garage owner concerned by approval of 3% GST

A business owner has expressed concerns about the effect changes to Guernsey's tax system will have on businesses.

Politicians voted by 22 votes for and 17 against to approve Policy and Resources' (P&R) tax package consisting of GST, a 15% income tax on the first £28,000 earned, higher social security rates, a new annual vehicle tax, higher corporate taxes and government savings.

Dave Beausire from Le Mont Saint Garage said it would have a "massive effect on business".

Deputy Lindsay de Sausmarez, President of the P&R Committee, said the States has c to stabilise public finances... and reduce the tax burden on people who are struggling with the cost of living".

Guernsey Retail Group said many retailers would be disappointed and worried for the future of their business following the decision.

The tax package is due to come in 2029, rather than 2028, after new estimates for corporate tax receipts came in at millions of pounds more than estimated.

Beausire said he has already seen businesses on social media making the decision to close at the end of 2028.

He said: "GST for business like ours, that buys in wholesale goods and then retails them out, it's going to cost me at least another person to administer it."

The Guernsey Retail Group said they had been told by retailers with businesses in Jersey that it took around one-day per quarter to fill in GST paperwork so that could be similar in Guernsey.

The Guernsey Retail Group said data it collected showed 95.4% of respondents saying they have "moderate" or "high levels" of concern over the introduction of a goods and services tax.

The States of Guernsey said it released a video explaining what GST meant for small businesses.

In the video it said businesses would have register if their taxable sales exceed £300,000 in a 12-month period.

Businesses below the threshold would not need to charge GST but could not reclaim GST on costs so they could choose to register, which would mean charging GST to their customers.

Guernsey Retail Group director Malcolm Woodhams said: "The real question is no longer whether Guernsey will have GST.

"It is whether we use this moment to build a stronger and more competitive local economy alongside it. If local businesses thrive, Guernsey thrives."

The Guernsey Retail Group said it would continue to "engage constructively" with government and advocate for practical policies that strengthen consumer confidence, improve local competitiveness, encourage investment, support the vitality of the island's commercial centres, and retain more expenditure within Guernsey.

De Sausmarez said the changes would "give us more resilience against economic shocks".

She said: "We'd like to reassure our local businesses that we will give them the support they need to help them smoothly through the transition...

"We've already engaged extensively with the business community to ensure that the design of our GST is as straightforward as possible for businesses to administer.

"Those with a turnover of less than £300,000 will not have to register for or administer GST, but for those that do register they'll hopefully be reassured to hear that it's very like the simple system applied in Jersey, mirroring their light-touch retail scheme as well."

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