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Pressure grows to exempt Alderney from tax rises

Political pressure is growing to exempt Alderney from new tax hikes announced in Guernsey's 2016 budget.

New proposals which will be debated in the States next week could see Alderney dodge a new increase in petrol duty and property tax hikes.

The Treasury is already intending to help Alderney's struggling economy by ''introducing a lower ‘tax cap’ of £50,000 for new residents to the island is worth trying [and] the Department will also consider what other fiscal incentives might be appropriate to encourage the establishment of new businesses and employment on the island.''

But Alderney States Members want them to go further.

Alderney is already disadvantaged as our fuel across the range of products by the time it reaches the pumps is sold at a considerably higher cost than it is in Guernsey.

– Louis Jean, Alderney Representative

He also argues that the average salary in Alderney is only around £17,000, compared to £30,000.

Alderney and Guernsey are tied together in what is called a 'fiscal union', meaning they share their tax take and annual budgets apply to both islands.

But if these new proposals, all aimed at helping a struggling economy in Alderney, are approved, it could lead to significant differences in the tax structure for the two islands, posing fresh questions about the validity and relevance of the fiscal union.