Individual - Significant developments

Last reviewed - 04 December 2022

Budget summary

Below is a summary of the key taxation changes to existing legislation as a result of the Chief Minister’s Budget speech on 28 June 2022.

All personal tax rate bands under both the Allowance Based and Gross Income Based systems have increased by 2% for a two-year period. Under the Gross Income Based System, income above £105,000 will be taxed at a flat rate of 25% (27% for the next two years).

The below benefits increased by 8%:

  • Disability Benefit.
  • State Pension

Category 2 Individuals 

The cap on taxable income for Category 2 has increased from £105,000 to £118,000. The minimum and maximum amounts of tax payable for Category 2 individuals have increased to £37,000 and £44,740 respectively.  

Additionally, all new and existing Category 2 individuals are required to pay an amount equivalent to the maximum tax payable (£44,740) by 30 November 2022 as a “one-off” advance tax payment. This amount will be refunded at the time that the Category 2 certificate is relinquished or surrendered less any balance of tax due at that time.

Note that this advance tax payment is in addition to any final balance of tax that is due in relation to the assessment for the tax year ended 30 June 2022. 

Further changes have been announced in respect to non-Gibraltar nationals who claim residency in Gibraltar and who are not in possession of either a Category 2 or HEPSS certificate or are in true third party employment. Such individuals may be taxed on their savings income, including pensions, interest, dividends and other passive sources of income. Taxpayers impacted by these changes will be able to apply for Category 2 status retrospectively, so long as they meet the eligibility criteria and pay any outstanding amount of tax.

Statutory Minimum Wage

The statutory minimum wage will increase from £7.50 to £8.10 (an 8% increase).

Import Duty

With effect from 29 June 2022 the 10% flat rate of import duty levied on all personal imports over £25 will be revoked.