(as published in the Gibraltar Chronicle) 

The Income Tax Office should apply whichever works best for you.  However, this depends on them having the right information from you.

You can make a quick comparison on-line at http://www.gibraltar.gov.gi/taxation , although you will need to work out the allowances available to you first.  Most taxpayers should by now benefit from the gross income system – the main exceptions being persons with low taxable incomes, or those who have a high level of allowances – probably related to mortgage interest and/or first-time homebuyer’s allowances.

If you are ordinarily resident in Gibraltar, you are taxable on your worldwide income.  However, exemptions from tax include savings income and rental income from property outside Gibraltar.  Savings income means interest income, dividends from a company listed on a recognised stock exchange, or income from a fund that is marketed to the general public.  Statutory pensions and approved occupational pensions are taxed at nil % (subject to age restrictions).

The tax rules have been toughened up on benefits-in-kind, so there is now no doubt that in addition to your salary, tax is payable on certain perks, for example, company cars, accommodation, life and health insurance, to name but a few.  Your employer should have informed you recently of the taxable amount of any such benefits, unless possibly your employer has generously agreed with the Tax Office that they pay the tax for you.  One point worth noting is that in addition to the exemptions noted above, there is an exemption from tax of up to £1,120 of the benefit obtained if your employer pays for health insurance for you and your spouse and dependent children.  If you receive such a benefit, your employer may have deducted this exemption to work out any tax payable.  On the other hand, they may not have … something to check.

Of course – your personal Tax Return for the tax year just ended is due by 30th November this year.  This is actually longer than the 30th September deadline under the previous system.  There are now penalties for late filing, although these do not apply until 1 July 2012.  Surcharges for any late payment apply now – but you should have had at least the correct amount of tax deducted under the pay as you earn system, so hopefully no additional payments will be due on your earned income.

Er, file them?  You might even find you’re due some money back from the Tax Office – particularly if you haven’t ensured that you tax code is kept up to date, or are still being taxed on the allowance basis.  Also, if you receive an assessment asking for more tax, check the allowances given and the system used – especially if you haven’t submitted a return for that tax year.