October 3, 2022

First with the Alderney News

Alderney takes back document duty and fuel tax

3 min read

States members voted to allow Alderney to set excise duty rates on motor fuel and document duty and ratified the legal framework of the new single Property Tax at the September States meeting.

Before agreeing the proposals some States Members expressed concerns that the government would be too wholly dependent on the new taxes to levy extra income.

The repatriation of the right to set and collect those taxes is part of the review of the Financial Relationship between Alderney and Guernsey, agreed in 2016.

In return for the redirection of those taxes, grants from Guernsey will fall away.

The grant currently received from Guernsey is £1.88m, and the provision, plus cash from various rents and permits raised locally, pays for running the civil service and services like refuse disposal and road and green space maintenance.

James Dent, chairman of the Policy and Finance Committee, said the income from those duties and the new property tax should neatly balance the existing Guernsey grant.

The legal framework for the new single property tax, which combines TRP and the Occupiers’ Rate, indicates the States of Alderney will set the tariffs and will be able to introduce new tariff categories in future. It will still be based on property measurement which will be delegated to DigiMap, the Guernsey digital service used by the States of Guernsey, and P&F will maintain and take responsibility for the accuracy of the property register. Powers will be granted to add penalties where tax is unpaid and an appeals panel and tribunal will be established to allow challenges to property classification and measurement.

The new arrangements will come into force when the ordinance receives royal assent.

Several States Members emphasised that when taxes were repatriated from Guernsey, Alderney would be very much on its own when it came to raising money for new initiatives or meeting any additional burdens on revenue.

They warned that there had been indications from Guernsey that the services Alderney was expected to pay for was only likely to increase.

Louis Jean said far from talks on the 1948 Agreement having stalled, they were advancing very rapidly.

‘Guernsey is handing back control to Alderney and saying ‘get on with it‘.

‘What concerns me is that what we receive from Guernsey is reducing and as we move away from paying into a central pot, whenever we have a shortfall in the budget in the future it must come from the rates.’

Both Alderney Representatives said they had been warned in the States of Guernsey by deputies to proceed very carefully with tax repatriation.

Alex Snowdon said:

‘John Gollop and Jennifer Merrett said ‘Be aware you don’t play into P&R’s hands with this. The financial relationship is changing.’

Demands on the tax for existing services were already substantial, he said.

‘We really need to be clear where we are headed with this. There are indications that the ambulance service will be bolted onto this. How many other things are going to be bolted on to this taxation. If we don’t create any other forms of revenue it will be the only way Alderney has to increase income.

‘The idea with taking back TRP originally was to help businesses on Victoria Street taxed at the same rate as those in St Peter Port despite much lower footfall. That idea seems to be drifting away.

‘I see this tax coming in and going straight up and people paying for more and more through it.

James Dent said:

‘I would support what Alex Snowdon and Steve Roberts are saying – we need to be careful but we will be careful.’

James Dent said discussions about the tax rates were for when budgets were being set.

All nine members voted in favour of setting document and fuel duty and eight members voted to approve the property tax framework, with Louis Jean against.

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