Local businesses will pay 12% Brexit levy, GFSC announces

Businesses regulated by the Gibraltar Financial Services Commission will have to pay a 12% levy in a move that aims to help the regulator recover the cost of preparing for business after Brexit.

The 12% hike will only be payable by regulated firms that passport into the UK, as these are the firms that will be most affected by the new relationship and future access to the UK market, the GFSC said in a statement.

This cost has been set at 12% of the total annual regulatory fee for the year ending March 31.

In a statement, the Gibraltar Government said it is committed to ensuring that Gibraltar firms benefit from continued access to the UK, Gibraltar’s most important market.

“The Government has secured a hugely significant commitment from the United Kingdom Government to a reciprocal continuation of the single market in financial services based on the alignment of regulatory outcomes and has worked closely with the GFSC to make this a reality and is cognisant of the resourcing demands related to EU withdrawal and preparing for this continued regulatory relationship with the UK,” the Government said.

The Gibraltar said it has considered and weighed up all of the responses provided by firms and industry associations during the one-month consultation period.

The government added it had taken into consideration the fact that is already provides a “very sizeable subvention to the GFSC.”

“The Government has and is providing material amounts of extraordinary funding to the Commission and has funded all of the costs of the Legislative Reform Programme which has been years in development, due to the size of the legislative task, and which has now come to fruition,” the statement said.

“On balance therefore, the Government feels that it is fair and consistent that on this occasion there should be a contribution from the industry and is content to approve the fees regulations to facilitate the UK Single Market Levy.”

The levy that is payable is proportionate to period regulatory fees and in line with the size and complexity of the regulated firms affected.

This will affect businesses including banks, e-money firms, insurance companies, alternative investment fund managers, insurance captives, MiFID firms, and insurance intermediary firms.

No levy will be applied to a firm that falls under these blocks but does not passport into the UK, the GFSC added.