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A potential tax error means a bank has claimed it is owed £15million back from Guernsey's Revenue Service.
The mistake is understood to be on the bank's part, and not an error by the island's Revenue Service staff, and will be "subject to rigorous and detailed checking" before any money changes hands.
But Deputy Lyndon Trott told the States this morning that it is "unwelcome news" and it will likely affect the island's financial position going in to 2025.
Pictured: Deputy Lyndon Trott.
The President of Policy and Resources said he is keen to regularly update the States on the island's latest financial position, with the 2025 budget being finalised before being published next month.
"We are now in receipt of the numbers to the end of August, and it's therefore timely to update the States ahead of the publication of the budget and our thoughts turning to 2025, so since my last update I'm afraid to say we've received some more unwelcome news," he said.
"I will start with, the Revenue Service has received what's called an error or mistake claim from a bank relating to previously assessed tax years back to 2018 which amounts to £15 million.
"I should stress that this claim is still subject to rigorous and detailed checking by Revenue Service staff, meaning that the quantum may change. Notwithstanding that, we must now make provision for this ahead of any repayment."
Pictured: Guernsey's Revenue Service is based at Wheadon House.
Deputy Trott insisted that the error is not one of the Revenue Service's doing and he's confident it won't be repeated.
"I want to stress that this position is not one of the Revenue Service's making. The issue is in the bank's historic tax calculations, which could not reasonably have been picked up by the service.
"I should also stress that this amount will not have an impact on the forecast for future years.
"Officials from the Revenue Service have been in dialogue with the bank in question to ensure that the estimated assessment on which current year tax is being paid reflects its latest actual position, therefore I am as confident as I can be, that there will be no further unpleasant surprises."
Deputy Trott did warn however that the financial forecast for 2025 is now looking more challenging than it was - compounded also by the recent news that a different bank has reported a downturn in profits meaning it is likely to be paying millions of pounds less in taxes.
"An already challenging year has now become £15m worse potentially," confirmed Deputy Trott.
"The general revenue budget for this year anticipated a small operating surplus of £11m, which has now turned to a forecast outturn of £24m deficit.
"When the trading entity losses are added to this, it takes a deficit to £30m for general revenue alone. If we also consider social security income and expenditure the overall operating deficit for core government is now forecast at £46m.
"To be clear, an element of this deficit is one off in nature and does not impact 2025 and future years.
"In terms of social security, the budget was for a combined operating deficit of £14m, with the forecast now expecting a deficit of some £16m.
"This has been caused by a small shortfall against predicted contribution income, and a slight increase in expected benefit payments."
Deputy Trott also reiterated that £23m of the core government deficit of £46m is classed as a 'one off' and is not expected to be repeated in future years.
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