The Gibraltar Budget 2024
“Keeping as our watch words the twin principles of responsibility and prudence”.
Partner Stuart Dalmedo summarises some of the key measures of the 2024 Gibraltar Budget.
Treaty Negotiations
The Chief Minister travelled to Brussels on 20th June and was able to have a first-hand briefing from those involved in the most recent technical negotiations immediately after the completion of the last full technical meeting.
The Government is optimistic about the opportunity to agree a Treaty, with negotiations likely to come to a successful conclusion in comings months.
Responsibility for Schengen checks rests with Schengen states and authorities, in the same way as responsibility for Gibraltar checks on immigration rests with Gibraltar.
Government will only bring back a deal if it is safe and secure. It has to be safe in respect of the sovereignty of Gibraltar remaining 100% British. It has to be secure in ensuring that jurisdiction and control are not in any way compromised, negatively affected or somehow lost.
And of course, the deal has to be beneficial. The Government is very clear in wanting to do a deal but is prepared not to do a deal if it is not the right deal for Gibraltar.
Budget Measures for 2024/2025
Income Tax
Tax rates on all bands under both the Allowance Based System and Gross Income Based System will reduce by 1% for individuals with gross assessable income of less than £100,000 per annum.
Tax rates on all bands under both the Allowance Based System and Gross Income Based System will reduce by 2% for individuals with gross assessable income of more than £100,000 per annum.
Corporate Tax
Corporate tax to increase to 15% (currently 12.5%), although no announcement on when this will be applied.
Protecting the Vulnerable
Those on:
- Minimum wage;
- Disability benefit; or
- State or old age pension,
will once again enjoy all the benefit of increases in line with inflation.
Minimum wage
Minimum wage to be increased from £8.60 to £8.90 per hour, although no announcement on when this will be applied.
Disability Benefits, State and Public Sector Occupational Pensions
State Pension and Disability Benefit will also go up by inflation in the region of 2.6%.
Full old age pension payable will now be £571.15 for a single person and £856.90 for a married couple.
Sponsored Patients Allowance
The sponsored patient’s allowance will increase by the rate of 3%.
Social Insurance
An increase of the cap on employers’ and employees’ social insurance contributions of 5%.
The 5% increase in the cap is implemented from today’s date (1 July 2024), which is the relevant start date for calculations.
Public sector fees and charges
All fees charged by any Government department and payable to Government, including licence fees and application fees etc. will increase in line with inflation estimated at 2.6%.
Electricity and Water Billing
Increase with effect from the bill for August 2024 of 2.6%.
Vehicle Park Renewal Pollution Levy
Whilst it was announced that every vehicle over 10 years old which is not a classic car, will pay an annual pollution levy of £10 per week or £520 charged on the anniversary of the first registration of the vehicle, whether in Gibraltar or elsewhere and that the fee will triple for commercial and public service vehicles for more than 8 passengers the Government has confirmed that this measure will not go ahead and has announced a consultation in its place.
Import Duty
Mild Hybrids
Introduce an import duty of 10% on any mild hybrid vehicles.
Full Hybrids & Plug-in Hybrid Electric Vehicles (PHEV)
Introduce an import duty of 5% on any full hybrid PHEV.
Pleasure craft
Introduce an import duty of 5% in respect of any importation where the vessel has not been bought before 30th September 2024.
Regiment Scholarship
Introduction of regiment scholarship to provide financial incentives to any young person resident in Gibraltar who would have been eligible for a mandatory university scholarship and who instead opts to join the Royal Gibraltar Regiment.
AIR BNB Properties
Government to introduce a mechanism so that every property offered for short term rental shall have to be registered and inspected. A fee to be payable for registration and other conditions will apply.
More details to be made available shortly, but intention to roll out this scheme before the end of the calendar year.
Special Stamp Duty on Off Plan Purchases
0.5% special stamp duty will be payable on assignment of purchase agreement (by the assignor).
First & Second Time Homebuyers Allowance
Now restricted to properties under £800,000.
Downsizing Incentive for Seniors
As a downsizing incentive for seniors (65+) introduce the equivalent of the first-time home buyers’ allowance for those selling after the age of 65 and moving to smaller properties.
The full 2024 Budget can be found here.
