The tone of unofficial Treasury comments following last week's meeting between PM Sunak and Chancellor Hunt suggests the UK government may be attempting to balance more than just the books in the lead up to the Autumn budgetary statement on 17th November. Their agreement "...on the principle that those with the broadest shoulders should be asked to bear the greatest burden” could be an effort to seek to accommodate public and wider market sensitivities. Whatever the motivation, the message is clear in that the looming reality is one where "everybody would need to contribute more tax in the years ahead".
Yet, there are a multitude of ways of affording equilibrium. Critics of the touted possible measures of capital gains tax increases and dividend allowance reductions may argue that small business owners (whom were not able to benefit from the government’s Covid-19 scheme) will be disproportionately affected. They may also point to a potential delaying of more substantial economic recovery and growth by reducing incentives to invest.
If the current form of fiscal-tightening measures materialise, however, with our common market with the UK on a number of financial services, our progressively increasing UK-facing insurance offering, burgeoning fintech, funds and private client spaces, as well as our non-taxation of capital gains and broader generous tax treatment, Gibraltar's ever-closer proximity to the UK may yet pay even greater dividends.