The St Helena Government has initiated a consultation on a new minimum wage trajectory for the upcoming three-year period. This process, which began in December with employer input, will continue into January 2025 with sessions intended for employees and the general public.
The government emphasizes that this consultation is an opportunity for individuals to express their views. Participation is encouraged to ensure that Ministers have access to comprehensive evidence when making decisions about future minimum wage adjustments.
One prevalent misunderstanding addressed during the consultation concerns taxation. It has been clarified that tax is not levied on all income once earnings exceed the personal allowance threshold of £7,000. Instead, tax applies only to income above this threshold.
For instance, earnings over £7,000 up to £25,000 are taxed at a rate allowing individuals to retain 74p of every pound earned over the threshold. For earnings above £25,000, individuals keep 69p per pound beyond this amount.
Several examples illustrate how this system affects different income levels:
- A person earning the minimum wage of £150 per week or £7,800 annually pays tax on just £800 yearly. Their net weekly pay after tax is approximately £146.
- An individual earning £192 weekly or £10,000 annually faces taxation on £3,000 of their income. This results in a post-tax weekly pay of around £177.
- For those earning £384 weekly or £20,000 annually, tax applies to £13,000 of their earnings. Their net weekly pay after taxes stands at about £320.
The government stresses that paying taxes is a social responsibility necessary for funding public services such as education and health care.
Failing to declare taxable income can result in penalties. Providing false or misleading information may lead to fines up to 75% of the tax shortfall plus the unpaid amount. Lesser infractions might incur penalties equal to 20% of the shortfall.
Efforts are underway by SHG (St Helena Government) to enhance its tax compliance function ensuring businesses and individuals meet their obligations thereby fostering a fairer system aimed at improving public services.
SHG encourages ongoing participation in the consultation process before it concludes on Friday 31 January 2025. Interested parties can contact Ann Muir at the Castle for one-on-one sessions.
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