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Channel Islands - Economy

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Financial Outlook


The island is approaching the end of a five-year financial transformation program under which the States of Guernsey (the parliament) aims to cut £31 million from its spending. The 2014 budget envisages the usual duty rises on alcohol, fuel, and tobacco, but no change to personal income tax as the government is in the middle of a review of the personal taxation system. Inflation on Guernsey was 2.7% in June 2013 and personal income tax allowances are going up by 2.1%, a slight cut in real terms. Revenue through 2013 has been disappointing but is expected to recover in 2014, with inflation rising to 3.3%.


Jersey’s draft budget for 2014 envisages a 1% cut in the national rate of tax, from 27% to 26%, and a £3,000 increase in the tax allowance for people paying to put a child through university. Jersey also plans to set aside £90 million for capital projects, including £16 million to improve a number of primary schools. A few years ago Jersey suffered from unsustainable deficits and an uncertain future in terms of its relation to the world economy. Today it has strategic reserves of more than £720 million. The government plans to issue up to £250 million in new public bonds with a view to building 1,000 new homes.

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