Guernsey · The 2026 Budget
The 2026 Budget runs a deficit of £47.8m before investment returns. Close it. Every figure you start from is a real line in that Budget, down to individual schools, the prison and the dairy. But the island answers back: raise a duty too far and the revenue walks out of the door.
Source: P&R 2026 Tax Reform Package: 3% raises £55m · derived: per-point yield scaled pro-rata
Source: Budget 2026: individuals £371.5m · derived: per-penny yield scaled pro-rata, ignores allowances
Source: P&R 2026 Tax Reform Package: £6m
Source: P&R 2026 Tax Reform Package: £10m
Source: P&R 2026 Tax Reform Package: £8m
Source: P&R 2026 Tax Reform Package: £7m
Source: P&R 2026 Tax Reform Package: costs £28m
Source: Budget 2026
Source: Budget 2026: +5% raised £437k in real terms for 2026
Source: Budget 2026
Source: Budget 2026
Source: Budget 2026: already rising 13.3% for 2026
Source: Budget 2026
Source: Budget 2026
Payments to outside providers for care the States does not deliver itself: nursing and residential homes, off-island treatment the island cannot provide, and third-sector contracts.
Assessed care packages for adults with physical, sensory or learning disabilities, and older people, whether delivered at home or in residential settings.
Running the Princess Elizabeth Hospital: wards, surgery, A&E, maternity and the clinical staff who deliver them.
Prescription and hospital medicines, including the high-cost drugs bought in from off-island suppliers.
Child protection, looked-after children, fostering and adoption, and the social workers who carry the statutory duty.
District nursing, community mental health, therapies and other care delivered outside the hospital so people are not admitted or can be discharged sooner.
HSC’s own finance, HR, governance and strategy staff, distinct from the corporate services run centrally for every committee.
Diagnostics, labs, imaging and other clinical support services that sit behind every ward and clinic.
Health promotion, screening, immunisation and the smoking cessation and substance use work funded alongside the tobacco and alcohol duty rises.
Facilities, catering, portering and the day-to-day running of HSC buildings and sites.
Medical leadership, consultant management and clinical governance across the hospital.
Maintaining and managing HSC’s buildings, from the hospital estate to community clinics.
The independent officer who chairs Children’s Hearings, the tribunal deciding compulsory measures for children in need of protection.
What your budget sets in motion. Where a duty rise drives trade off the books, the lost revenue is already netted off the figures above, so the gauge shows what the States would actually collect rather than what the rate card implies.
Nothing triggered yet. The Budget as passed sets nothing new in motion.
Nothing changed yet. Move any lever and your choices are itemised here.
Guernsey is not the only small island balancing a budget this way. Jersey and the Isle of Man face the same pressures with different tax bases, and neither has an easier answer.
Revenue 767m against spend 748m, a 48m deficit before investment returns
No GST or VAT; 20% flat income tax; no general corporate tax
The only Crown Dependency with no broad-based consumption tax at all, which is the gap the Tax Reform Package is built around.
Budget 2026
Government Plan 2026 puts net revenue expenditure at £1,278m; the Fiscal Policy Panel says planned spending exceeds income and leans on borrowing and reserves
5% GST; up to 20% standard-rate income tax; a personal exemption of £21,250
Jersey has run a GST since 2008 and still shows a Government Plan that spends ahead of revenue, run alongside a larger capital programme including new healthcare facilities.
Government of Jersey, Government Plan 2026-2029; Fiscal Policy Panel
2026/27 revenue spending of about £1.47 billion, with a structural deficit of close to £98m bridged by £126m drawn from reserves
20% VAT and customs union with the UK; income tax at 10% then 21%, personal allowance £17,000
The Isle of Man shares a VAT and customs union with the UK rather than running its own consumption tax, and is drawing down reserves to close its own gap through the later 2020s.
Isle of Man Treasury, Budget 2026/27
Every baseline is exact. Revenue of £767.5m against expenditure of £748.5m gives a revenue surplus of £19.0m; below-the-line costs of £66.8m (trading entity impairments £3.3m, non-capitalised project costs £25.0m, depreciation £32.2m, interest £6.2m) produce the £47.8mdeficit. The spending detail is the Budget’s own service-area analysis, and each committee’s lines sum to its published cash limit. A unit test in this repository asserts those reconciliations, so a mistyped figure fails the build rather than reaching this page.
Aurigny sits outside all of it, which is the point of including it. It is a States-owned company under the Trading Supervisory Board, not a general revenue cash limit, so its losses never appear in the £47.8m. Moving the Aurigny levers changes the separate figure in the bar above, not the main gauge. The three loss-making trading entities do move the main gauge, because their combined deficits are exactly the £3.287m impairment inside it.
The elasticities below are this tool’s assumptions, not States forecasts. Raising a duty does not raise proportionate revenue, so each one carries a price elasticity: quantity falls as the rate rises, and past a threshold a second, steeper elasticity represents trade moving to duty-free allowances, personal imports and illicit supply. The States have not published Guernsey elasticities, and these are ordinary published ranges for each class of goods rather than local measurements. They are the numbers to argue with.
| Lever | Base | Steepens to | Evidence it is real |
|---|---|---|---|
| Tobacco duty | -0.6 | -1.3 past +20% | Budget 2026 states tobacco revenue reflects "increased duty and reduced demand"; revenue rose about £5m when travel stopped in 2020-21, sizing the off-island channel against an £8.4m base |
| Alcohol duties | -0.5 | -0.9 past +30% | The same duty-free and personal-import channel |
| Motor fuel duty | -0.3 | -0.6 past +40% | Fuel is hard to import privately; erosion comes from mileage and electric switching |
| Document duty | -0.7 | -1.2 past +25% | Budget 2026 calls receipts "highly sensitive to shifts in property transaction volumes" and carries a £2m risk on it |
| Vehicle first registration | -0.8 | -1.4 past +60% | Purchase timing is easily deferred |
| Income tax rate | -0.25 | -0.7 above 23p | Budget 2026 carries a £5m risk on a 1% forecast error, showing how mobile the base is; the Standard Charge regime makes high earners especially so |
| Commercial TRP | -0.15 | -0.4 past +50% | Property cannot leave, but occupancy and use can change |
| Domestic TRP | -0.05 | no steepening | Close to unavoidable, which is why it raises reliably |
GST is deliberately given no elasticity: the States’ own £55m at 3% is used at face value, on the assumption their costing already nets off compliance. What is added instead is the published running cost of £2.5m a year, which lands on the spending side the moment you adopt it. The one-off build of £3.6m to £6.1m, within an £8.65m to £12.2m total reform bill, sits outside an annual budget and so is flagged rather than charged.