Guernsey

Tax measures – Direct and Indirect     |     Employment-related measures     |     Economic stimulus measures     |     Other measures and sources

Return to homepage  |  Last updated: 15 April, 2020

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Deferral of payment of Social Security contributions

• Social Insurance Employer contributions are due in mid-April. The government are taking this into consideration and deferring payments for both Quarter 1, and Quarter 2 (due mid-July), with the intention to review this easement again during Quarter
• Coronavirus Payroll Co-Funding Scheme
• The government will pay employees an amount equivalent to Guernsey’s minimum wage. This is currently set at £8.50 per hour (£8.05 for 16- and 17-year olds). For a 35-hour week this figure would equate to a gross figure of £298. The States of Guernsey will meet 80% of this figure (i.e. £238 per week based on a 35 hour week). Employers must make up the remaining 20% (equivalent to £60 per week). Employers are encouraged to ‘top-up’ these amounts further if they are able to do so.
• The Coronavirus Payroll Co-funding Scheme will be available to all employers (regardless of number of employees) in the sectors affected by loss of business income due to Coronavirus. Initially, these are expected to be the following sectors:
  • Hospitality And Tourism;
  • Passenger Transport And Travel;
  • Rental And Leasing Of Cars And Recreational Goods;
  • Recreation And Entertainment;
  • Event Management And Event Services;
  • Personal Service Activities Such As Hairdressers, Beauticians And Animal Boarding;
  • Commercial Fishing;
  • Private Extra-curricular Education Such As Dance And Riding Schools;
  • Non-food And Non-pharmacy Retail;
  • Advertising And Marketing;
  • Construction;
  • Manufacturing
• To be eligible for support, the business must have been trading for at least 6 months (that is since 1st September 2019).
• The support is available for an initial period of up to three months (13 weeks). This will cover the period to late June.

Small Businesses and Self-employed Grant

• Aimed at smaller businesses and those who are self-employed as a means to help their business and be utilized in whichever way you deem appropriate. Although similar to the Payroll Co-Funding scheme it is intended to last 3 months. The details of the support are:
  • The amount payable will be a flat sum of £3,000.
  • The grant will be available to self-employed persons (single operators) and to self-employed persons that employ up to 10 persons (including themselves). If the business employs staff, you are also able to claim support under the Coronavirus Payroll Co-funding Scheme (see above).
  • To be eligible for support, your business must have been trading for at least 6 months (that is since 1st September 2019).

Deferral of rent payments to the States of Guernsey by business tenants

• Businesses operated within a States of Guernsey land, or property then the Government will be considering deferring rents due for Quarter 1, and Quarter 2 of 2020. This easement covers business rents only and not residential property.

Economic substance

• The coronavirus crisis will undoubtedly impact the ability of certain companies to meet the economic substance test in Guernsey. The States of Guernsey have indicated they will take a pragmatic approach in this regard. All companies must ensure that maintain clear documentation with regards to how they have been impacted.

Loan Guarantee Scheme

• Businesses that wish to utilize the scheme should talk to their banks directly. The scheme is operated by the clearing banks - Barclays, HSBC, Lloyds and RBSI/NatWest, however the Scheme will be open for other banks to join should they wish to.
• The scheme is also being established in partnership with the governments of Jersey and the Isle of Man.
• The Scheme requires the provision of underwriting guarantees to the participating banks of up to 80% of lending, up to a maximum of £40million.
• The support will be focused on Bailiwick businesses. The scheme will not provide underwriting support for any lending currently in place, so there would be no transferring of existing risk to the States under the Scheme.
• The Scheme only applies to trading businesses. Businesses regulated by the Guernsey Financial Services Commission and property investment and development businesses are excluded. This is subject to a maximum turnover of £10 million.
• The Scheme only applies in respect of new lending and not any existing debt issued by the banks, including the cancellation of one form of lending and its replacement with another.
• The States Guarantee will apply in respect of 80% of the total amount provided by the banks.
• The loans and overdrafts will be for between £5,000 and £500,000.
• The Scheme will remain open until the 31st December 2020
• The government guarantee will remain valid for a total of 8 years, this is made up of a term of 6 years, with an additional 18 months to allow the banks to effect recovery and a further 6 months for the bank to effect a claim against the States’ Guarantee if necessary.
• An individual’s principle primary residence cannot be provided as security to a bank in respect of the Scheme.
• The banks may lend up to £250,000 without seeking any form of security from the borrower.
• The banks have a reporting requirement to government in respect of the number of loans issued and the amount and in respect of applications received but declined.

Hardship Fund (£5m)

• To be administered via Social Security to support those in greatest need who may not otherwise qualify for Income Support or Sickness Benefit. This will help the tourism, hospitality and construction sectors for example by enabling workers who have been laid off to secure short-term financial support so that they do not leave the future labor market.

Moorings fees for Commercial Fishermen

• To assist, the government have taken the decision to suspend fees for commercial fishermen who moor their vessels in St Peter Port and St Sampson harbors
• Guernsey Financial Services Commission providing extensions for key financial returns
• Returns to the Commission which would ordinarily require auditing (e.g. because they relate to a year end result) may be submitted in an unaudited form without a special concession being sought from the Commission.
• Those financial returns for insurers, insurance intermediaries and managers, investment firms, funds and fiduciaries which would require submission by the end of April 2020, may be submitted at any point before the end of May 2020 in unaudited form.

Guernsey Financial Services Commission has postponed routine supervisory visits to firms

• The Commission has reviewed its work plans for 2020 and will be cutting or delaying considerable amounts of industry-facing activity that does not directly relate to financial stability or consumer welfare. Consequently, all routine supervisory visits to firms will be postponed with effect from 21 March unless the Commission becomes aware of serious issues that require close scrutiny .

Main sources of information

• States of Guernsey
• Guernsey Financial Commission services

Tax: Antony Mancini – amancini@kpmg.com
Advisory: Linda Johnson - lindajohnson@kpmg.com