VAT rise 'to have minimal effect' in Guernsey

The rise in value added tax (VAT) in the UK should not hugely affect island businesses, the president of Guernsey's Chamber of Commerce has said.

Guernsey is VAT free, but many goods in the island are imported from the UK where the tax went up by 2.5% to 20% on 4 January.

Julian Winser said the VAT increase would have little impact on the island.

He said it meant Guernsey would be seen as a more financially attractive place to live.

Tony Creasey, managing director of Creasey's and the island's Marks and Spencer franchise, agreed and said the impact would be felt most keenly by smaller businesses.

He said: "It's another pressure on the cost side of your business and ultimately that may lead to the prices you charge your clients for your goods and services in turn to go up somewhat.

"But the price of most commodities in the shops won't change overnight.

"The impact on Guernsey should be minimal and not noticeable."