Guernsey’s economy has transformed over the last fifty years, moving from ship-building and mining to a booming finance industry that is now recognised as the primary source of income for the island.
A third of Guernsey’s overall income is derived from financial services such as fund management, private wealth management, insurance and banking, with the island now recognised as an International Finance Centre.
While this move to new industries has helped Guernsey flourish, its traditional sectors also continue to prosper. Agriculture and horticulture continue to be key areas for the island’s workforce, specifically the dairy and seafood industries.
Finally, tourism still plays a major part in the economy and with over 300,000 visitors a year to the island, hospitality remains a vital employment pillar.
If you’re looking to work in Guernsey, below we explain the Right to Work law, how tax works on the island and how the social security scheme operates.
Right to Work Law
If you want to work in Guernsey, the law states that you must have a valid Resident Certificate or Permit or an Employment Permit (which used to be called a Right-to-Work document).
This document confirms that you are lawfully housed in Guernsey or have the right to work on the island. You will need to show copies of these documents to your employer and they’re required to keep a copy of it for themselves.
On top of having this, every person that wants to work in Guernsey has to inform Social Security and also register with the Revenue Service. When you register, you’re given a tax number and a coding notice to maintain for your own records.
Next: About Guernsey
Tax in Guernsey
Because Guernsey is a self-governing dependency, it has its own tax system that differs from the mainland UK.
The tax outlook for all residents can easily be broken down into the following:
- 20% income tax
- No capital gains tax
- No VAT tax
- No inheritance tax
- No wealth tax
- No council tax
- No income tax on first £10,000 of earnings (similar to a personal allowance)
Similarly, the company tax outlook is as follows:
- 0% – the rate applicable to the majority of companies
- 10% – the rate applicable to companies in banking, insurance or other fiduciary companies
- 20% – the rate applicable to utilities or profits from property development and rental activity
When you move to Guernsey, you’re required to register with the Guernsey Income Tax Department and file an annual tax return.
The Guernsey social security scheme funds healthcare while also providing benefits in the workplace including:
- Sickness benefit
- Invalidity benefit
- Industrial injury benefit
- Unemployment benefit
- Workers Compensation
- Bereavement benefit
- Death grant
- Maternity benefit
The social security scheme is funded by payments from Guernsey residents, through earnings or an income-related contribution scheme.
Employees within Guernsey pay 6.6% of their gross earnings towards the Social Security Department, which then matches that contribution with their own. If you’re self-employed, you pay 11%.
Social security is applicable to everyone over school leaving age. If you do not work but earn revenue from other sources, an alternative rate applies.