Introduction

At the Parliamentary session of 5th July 2016 the Chief Minister delivered a cautious and prudent Budget speech. As anticipated, in light of the post Brexit environment, there was a stimulus measure announced designed to encourage business start-ups and to keep the general costs of doing business down so as to encourage economic growth.

Economic Highlights   

• Inflation 0.3% (2015)
• GDP £1.48bn for 2013/14 (+12.3%)
• GDP estimate £1.64bn for 2014/15 up 10.7%
• Forecast GDP £1.77bn for 2015/16
• GDP per capita ($90K) now ranked 4th in world per IMF measures (2015/16)
• Net public debt 19% of GDP (target 12.5% by 2019/20)
• Budget surplus at £38.8M

Taxation Highlights - Business   

• 10% company tax rate unchanged.
• Tax receipts up 23% (2015/16)
• New start up tax credit allowing sheltering up to £500K of profits for each of first 3 years. Must create at least 5 new jobs
• Business rates unchanged   
• Minimum wage up 3p to £6.28 per hour (+0.5%) from 1 August 2016
• No increase in water, electricity or fuel
• Housing initiatives relating to “key workers” under consideration

Social insurance  

• Unchanged
• Reformation of social insurance system under review

Taxation Highlights - Individual

• Tax assessments for 2009/10 and 2010/11 now finalised (2011/12 and 2012/13 this coming year)
• Persons with assessable income of up to £11,050 (£10,500) will pay no income tax
• Tax amnesty extended a further 6 months but on less favourable terms

Allowances Based System (ABS)

• Allowances increased across a wide range of categories 

Gross Income Based System (GIB)

• No Changes

Trusts & Pensions   

• Decision on mandatory private sector pensions deferred

Category 2 / HEPSS  

• Working group to be reconvened to ensure model remains attractive
• Tax savings for Cat 2s as a result of ABS tax cut

Property

• Housing initiatives relating to "key workers" under consideration
• Finalising negotiations for major new reclamation around Coaling Island
• Government tenants face 3% increases in rent (first since 1984) 

Import Duty   

• Duty eliminated or substantially reduced on a wide range of items including eyewear, boat supplies
• New sugar tax for fizzy drinks and sweeteners

Click here BUDGET SPEECH 2016 to read the full budget speech.

Almanac Limited

30/2 Cornwall's Lane

Gibraltar

www.almanac.gi

+350 200 42250