Guernsey Clarifies Situation On Income Tax Coding Changes

by Jason Gorringe, Tax-News.com, London

28 December 2011

Guernsey's Income Tax Office has published a statement reassuring taxpayers that income tax deductions under the Employees Tax Instalment Scheme will take into account from January 2012 the increased personal allowances that were approved by the island's legislative assembly, the States of Guernsey, last week.

Income tax coding notices for 2012 were issued by the Income Tax Office earlier this year, but they were based on the allowances that applied for 2011 because it was not until this month’s States Meeting that the States approved increased allowances for 2012.

In order to save costs, on printing and postage, most employees will not receive revised coding notices for 2012 but all employers will be given the correct information for each of their employees.

Rob Gray, the Director of Income Tax, said:

“Obviously, in order to give employees time to check their coding notices for 2012, so that any amendments could be made by the Income Tax Office in good time, the coding notices had to be issued based on the allowances as they then stood. As the States has now agreed to increase personal allowances for 2012, those codings will be incorrect.”

“We will be advising all employers, however, of the correct revised codings for their employees so that the correct deductions can be made from salaries and wages from the commencement of 2012.”

“We did not think it would be environmentally friendly, nor an appropriate use of public money, however, to issue revised coding notices to all employees. There will be some exceptional cases (such as married couples who elect for separate assessment, where allowances are shared) where we will be issuing revised coding notices, but this will be the exception rather than the rule. As a consequence, when most employees receive their first payslip in 2012, this will show a coding higher than is reflected on the coding notice that was received earlier this year, to reflect the increase in allowances that the States has now approved. There is no need for employees to contact the Income Tax Office concerning this unless they believe that their coding notice is incorrect for any other reason.”

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