Ok, sooo.. I was looking into this for the past 40 mins and I came up with this solution.
Open up lib/zend/locale/data/en.xml
Scroll down to territories.. add in territory IF it is not already listed.
GG for Guernsey
JE for Jersey
(luckily both these are already in my file)
Then go to PHPmyadmin
go down to directory_country
Click SQL Query and type
or delete where 1
SELECT * FROM `directory_country`
Add these into the value box
New country code for Guernsey is GG, GG GBG
Untick the ignore box and continue to add
New country code for Jersery is JE, JE, GBJ
Leave the function box blank
New countries will now appear in your backend, so you can add VAT rules for these countries.
I hope this helps somewhat in terms of the basic principles of adding a country.