18 Mar Government Measures on Commercial Tenants
Her Majesty’s Government of Gibraltar have announced new measures effective from 16th March 2020 to assist certain businesses in Gibraltar during the current pandemic affecting the world. These businesses are those within the hospitality, leisure, distributive and catering sector (the “affected sectors”), although it is currently speculative which businesses will fall within the definition of “leisure”. The measures are currently as follows:
- Where the Government is the direct landlord of such businesses in the affected sectors, the Government will waive all commercial rents for the second quarter of the calendar year 2020.
- Where there is a private landlord, they are encouraged to be as flexible as possible and it would appear that the private landlords can either:
- waive at least 50% of the rent due in the second quarter of the calendar year 2020, or the Government will introduce legislation for the gross rent due for the second quarter of the calendar year 2020 to be taxed, without deductions, at 50%. Any tenant who is required to pay the rent without subsidy will be allowed a deduction against their tax liability of three times the amount of rent paid; OR
- defer the rent due in the second quarter of the calendar year by waiving it and extending the lease by a further three months.
- All business rates for businesses in the affected sectors for the second quarter of the calendar year 2020 are waived.
- Business water and electricity charges for businesses in the affected sectors for the month of April are allowed to be paid evenly over the following 12 month period without penalty.
- Businesses in the affected sectors will not attract any PAYE or employee or employer Social Insurance contributions for employee salaries for the month of April (to be further clarified).
- A stock purchase scheme is to be introduced whereby catering establishments can sell any perishable stock to the Government that they may hold which might spoil and which the Government can use in its own catering facilities.
On the information currently in the public domain, it is not currently clear how the provisions to waive the rent would be enforced against landlords that were not flexible as detailed above. We will have to wait for the publication of any draft legislation to advise on this point further.
For other business sectors, the following measures have been announced:
- Fees usually payable in advance to the GFSC in April will be payable in advance in quarterly installments.
- Fees are to be waived for employees registered at the ETB in the second quarter of the calendar year of 2020.
- An online streamlined work permit and ETB process will be introduced by Government.
- Employers can defer their payments of PAYE and Social Insurance by 8 weeks from the due date.
- Import duties have been waived from 16th March 2020 until midnight on 30th April 2020 in respect of all goods except for tobacco, fuel and alcohol. This measure is to be reviewed before the end of April 2020 with business representative organisations.
Further measures may be announced by the Government in due course. If you require any advice on any of the new measures, please do not hesitate to get in contact with us.