Tom Rylatt
2025 Guernsey election candidate

BALANCING THE BOOKS / FAIRER TAX SYSTEM

I support the manifesto: 'Our Plan for Guernsey: 2025-29 And Beyond'.

BALANCING THE BOOKS

Our six-step plan will get Guernsey’s finances back on track. Only a government that understands the importance of living within our means can ensure the long-term prosperity of Guernsey for all of us and future generations. Last year, the States approved a partially funded budget. Without action, our reserves will run out in just seven years. Addressing this black hole in public finances is essential for the wellbeing and success of our island. We support fixing Guernsey’s finances with the six steps outlined in this section.

Key policies we support:

  1. Pioneering a new Additional Earned Allowance (AEA) for all over-16s, including school leavers, graduates, and apprentices (except those on Short-Term Employment Permits) on the first £100,000 of their taxable earnings until they are 30. This will save up to £20,000 in tax, which will go into the new GPSA, to enable saving for future housing needs, or an eligible pension scheme.

  2. Wholesale reform of our entire tax system to provide more support to the average islander. We do not support GST+ in its current form.

  3. Introducing a 1% reduction in baseline spending for each year from 2026, saving Guernsey more than £25 million a year by 2029.

  4. Work with Jersey to increase the zero/10 rate of tax to zero/15, whilst retaining the existing exempt bodies regime and economic substance requirements.

STEP 1: A GOVERNMENT FOCUSED ON GROWTH

Driving Guernsey’s economic growth is at the heart of our plan for a responsible, low-tax model. To improve public services and deliver value for money, we need a vibrant and dynamic economy. This is why our manifesto sets out a vision for a flourishing economy, with growth at its core

STEP 2: DELIVERING EFFICIENT AND EFFECTIVE PUBLIC SERVICES

To deliver better value for money from our government and to make our public services more effective, we need a fresh approach.

We support:

  • Introducing a 1% reduction in baseline spending for each year from 2026, saving Guernsey more than £25 million a year by 2029.

  • Establishing an independent Performance & Reform Council where islanders with a proven track record can voluntarily advise committees on how to make savings.

  • Reviewing public services with the goal of streamlining their organisational designs, particularly at a senior level.

  • Commissioning businesses and charities that can deliver public services more effectively, where appropriate.

STEP 3: SENSIBLE, SUSTAINABLE INVESTMENT

Government must be realistic about planned infrastructure projects if it wants to deliver for Guernsey.

We support:

  • Reviewing the capital programme within three months to properly prioritise it, so the cashflow, funding requirements and timetable can be effectively planned.

  • Introducing an independent, non-political Infrastructure and Capital Projects Board to improve governance and oversight of projects, without relying on external consultants.

  • Ensuring the best allocation of funds in capital projects by properly accounting for the cost of capital.

STEP 4: FIXING TAX ADMINISTRATION

The effective administration of our tax system is crucial for the management of public finances. It is also essential if the public is to agree with increasing taxes.

We support:

  • Removing the requirement to file income tax returns for the majority of taxpayers whose earnings have already been taxed at source.

  • Introducing self-assessment for individuals with complex tax affairs, while ensuring rigorous high standards.

  • Working to pre-fill tax returns with information already held by Revenue Services.

  • Allowing taxpayers to amend returns within the filing period to correct errors.

  • Raising more tax revenue by changing the rules on funds coming out of pension schemes as commutations.

STEP 5: IMPROVING CORPORATE TAXES

Guernsey’s corporate tax system must be reformed to improve fairness and increase revenues before further increasing the tax burden on individuals. We support:

  • Work with Jersey to increase the zero/10 rate of tax to zero/15, whilst retaining the existing exempt bodies regime and economic substance requirements.

  • Aligning with Jersey’s system of taxing businesses rather than profit streams.

  • Scrapping the ability to use non-commercial shareholder loans to defer tax due on income rolled up in Guernsey companies taxed at the standard rate of 0%.

  • Ensuring that taxable income received in personal investment holding companies is properly taxed.

  • Introducing incentives to encourage the earlier distribution and taxation of historic undistributed profits from personal investment companies.

STEP 6: CREATING A FAIRER TAX SYSTEM

Guernsey’s tax and social security contribution systems must be redesigned to make them fairer for all islanders. Our future depends on more young people contributing to our island by remaining in, returning, or moving to Guernsey and our tax system must encourage this.

We support:

  • Establishing a new tax-free Guernsey Property Savings Account (GPSA) for first-time buyers to save up to £60,000 towards the purchase of their first property or a rental deposit.

  • Pioneering a new Additional Earned Allowance (AEA) for all over-16s, including school leavers, graduates, and apprentices (except those on Short Term Employment Permits) on the first £100,000 of their taxable earnings until they are 30. This will save up to £20,000 in tax, which will go into the new GPSA, to enable saving for future housing needs, or an eligible pension scheme.

The States will need to raise more revenue to fund public services and build essential new infrastructure, but individual islanders cannot be expected to shoulder this burden entirely. Rightly, they will expect to see progress on the first five steps that have been outlined before being asked to pay more. GST+ is scheduled to take effect from 2027. While some form of consumption tax may be needed, it is far from optimal and we do not support GST+ in its current form. We need wholesale reform of our entire tax system to provide more support to the average islander, while building resilience in light of uncertainty over proposed changes to international rules on corporate tax.

WE SUPPORT REDESIGNING A FAIRER, LOW-TAX SYSTEM IN LINE WITH THE FOLLOWING PRINCIPLES:

  • Fairness - every individual and business that benefits from public services in Guernsey should make a fair and appropriate contribution to their provision.

  • Simplicity - we need a system that is simple to understand for those paying into it and simple to administer.

  • Sustainability - the long-term prosperity of Guernsey depends on a tax system that is capable of raising the revenues to avoid running unsustainable deficits.

  • Competitiveness - Guernsey must remain an attractive location for businesses and people, especially the younger generation.

  • Certainty - individuals and businesses need assurance our tax system is stable to effectively plan for the future.

  • Distortion - the tax system should incentivise all individuals and businesses to make decisions for the right reasons, not for tax reasons

WE SUPPORT THE PREPARATION OF A REVISED TAX AND SOCIAL SECURITY PACKAGE BY MARCH 2026. IT WILL:

  • Protect lower and middle income households.

  • Not tax capital, wealth, or inheritance.

  • Simplify personal tax caps to ensure fairness whilst remaining competitive.

  • Be harmonised with the social security contribution system.

  • Responsibly balance different sources of tax income.

  • Broaden Guernsey’s tax base.