The St Helena Government is currently consulting on a new minimum wage trajectory for the next three year period. This started in December with employers and continues into January 2025 with sessions planned for employees and the general public.
Your Role in the Consultation
This consultation is an opportunity for your voice to be heard. Your participation ensures the best possible evidence is provided to Ministers when taking a decision on the forward trajectory for the minimum wage.
Clearing Up Misconceptions about Tax
A common misunderstanding emerging is that once you have earned above the personal allowance threshold of £7,000 you then pay tax on all of your income. This is not true. Tax is applied only to earnings above the threshold so most of your income remains yours to keep.
Here are some facts about paying tax in St Helena:
Do you know that for every £1 over the tax threshold of £7,000 (up to £25,000) you keep 74p? The same principle applies to earnings over £25,000, that you keep 69p for every pound above the £25,000.
Examples.
- For a person on the minimum wage of £150/week or £7,800/year for a 37.5 hour week this means only £800/year is liable to tax. Their pay for the week of £150, is £146/week after tax or £7,592/year.
- For someone on a wage of £192/week or £10,000/year this means £3,000 is liable to tax. Their pay for the week of £192, is £177/week after tax, or £9,220/year.
- For someone on a wage of £384/week or £20,000/year this means £13,000 is liable to tax. Their pay for the week of £384, is £320/week after tax, or £16,620/year.
Why Paying Tax Matters
Paying tax, if you are eligible, is a social responsibility. The government, any government anywhere, needs to raise revenue to pay for the delivery of public services which we all use and includes education, health and refuse collection to name but a few.
A Note on Penalties
Not declaring income that is liable to tax is an offence carrying a fine. In a worst case scenario, for example by a person knowingly giving false or misleading information to the tax office and not paying the correct tax, the fine could be as high as up to 75% of the tax shortfall in addition to the amount that should have been paid. In less serious scenarios, this could result in a penalty equal to 20% of the tax shortfall.
Strengthening Tax Compliance
SHG is working to strengthen its tax compliance function and the team will be focussing on ensuring that those businesses and individuals who should be paying tax are doing so, creating a fairer, more robust system, which will go some way in helping improve public services for the benefit of all.
SHG looks forward to your continued participation in the consultation process. Contact Head of Strategic Policy, Ann Muir, at the Castle on 22470 for a one to one session. The closing date is Friday 31 January 2025.
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SHG
22 January 2025
