Guernsey Issues Guidance Note On Payment Of Income Taxes

by Robert Lee, Tax-News.com, London

24 April 2009

Guernsey homeowners with mortgages are being warned that interest rate cuts may mean that they are underpaying Income Tax through their wages.

Allowances granted each week or month through the Coding Notice system take into account tax relief granted on mortgage interest paid.

But as interest rates have been cut in recent months, leading to savings for people on their mortgages, information held at the Income Tax Department about the levels of mortgage interest paid could well be out of date.

If they are, taxpayers may be receiving more credit for their mortgage interest payments than they should, and could underpay their tax as a result.

“Coding notices do detail the amount of mortgage interest relief allowed, but these figures could be based on information which is a couple of years old,” said Rob Gray, Director of Income Tax.

“I’d urge anyone who has seen their mortgage interest payments cut significantly to check their coding notice and if the amount of interest relief is likely to be excessive, to let us know their revised estimate for 2009.”

“Falling interest rates may be good news to some people, but the last thing they want to see is an unexpected Income Tax bill at the end of the year as a result of those savings.”

Recommended