The Government of Gibraltar recently published the Appropriation (Business Employee Assistance Terms COVID-19) Regulations 2020 (“the Regulations”) concerning financial relief for employers who are directly affected by the ongoing pandemic and lockdown imposed. The Regulations can be found here.

Verralls have been advising on the contents of these regulations and for the benefit of our clients and/or prospective clients, we have compiled the below frequently asked questions. If your query is not addressed below, please feel free to contact us and our team will be happy to assist you in these uncertain times.

Who can apply for these measures?

Any business which does not fall under the following categories (“Excluded Businesses”) can apply:

• Utility providers;
• Telecommunications operators and internet service providers;
• Data centre providers;
• Care workers;
• Supermarkets;
• Grocers;
• Butchers;
• Market Stalls;
• Wholesalers with a tobacco licence;
• Petrol stations;
• Food delivery companies;
• Online gaming industry and casinos;
• Accountancy firms;
• Law firms;
• Businesses that are licensed by the FSC (including insurance businesses and intermediaries);
• Pharmacies;
• Health stores;
• Bunkering, ship chandlers, sea transport and other shipping businesses;
• Property management companies;
• Businesses that are predominantly reliant on Government as their main source of income; and
• Any other business deemed to be in substantive operation.

N.B. The above Excluded Businesses are as at the time of publication accurate although the Government may add/remove Excluded Businesses by way of Gazette.

It should be noted that it is for the Employer to make the application and an employee cannot make an application for and on behalf of its employer.

Where an employer is reasonably aware that an employee is already subject to these measures (i.e. due to an application on his/her own merits due to a self-employed venture or due to a second employer’s application) then the employer must not make a second application for the benefit of said employee.

Who do the measures benefit?

Applications are made by employers for the benefit of inactive employees (which include full time or part time employees). “Inactive employees” are employees who are not being provided with work and who cannot attend to the workplace due to the current pandemic – for the avoidance of doubt those employees who can work from home are not considered “inactive” for the purposes of the Regulations.  Inactive employees will also be recorded as being inactive with the Department of Employment.

The following caveats should be noted:

1. The employee in question must have been registered with the income tax office and Department of Employment before 15 March 2020;
2. The employee in question must have been employed for a minimum period of 28 days in the period of 15 September 2019 to 15 March 2020;
3. Inactive employees who receive an income in excess of £15,000 from non-employment (e.g. rental income) will not be eligible for these measures;
4. Detached workers are ineligible;
5. An inactive employee who returns to work is no longer considered inactive for the purposes of the Regulations; and
6. Employees who are on sick leave are ineligible – in this respect, their usual conditions of employment will apply.

What if I’m self employed and suffering?

The measures also apply to “inactive self-employed persons” provided always that these self-employed persons were registered with the income tax office or department of employment before 15 March 2020.

What form does the payment take?

Once an application is made and approved, the Government will make a payment from a special response fund. The payment will be made by way of bank transfer and as a contribution to the Employee’s wage. The Employer will be under a positive duty to transfer this contribution to the beneficiary employees within 3 days of receipt of receipt. All contributions paid to the Employer are held on trust by the employer for the benefit of the inactive employees.

The Employer is also under a positive duty to maintain records of any and all contributions and payments made under the Regulations.

How much will I/my employees receive?

Calculations are dependent on the type of beneficiary. By way of summary (kindly note that these are accurate as at date of publication):

• In respect of full-time inactive employees: contributions are calculated by multiplying a 7.5 hour work day by 22 working days with the minimum wage of £7 per hour giving a total of £1,155 per calendar month;
• In respect of part-time inactive employees: Average daily working hours are calculated from 2 January 2020 to 15 March 2020 (provided this is not more than 390 hours), this average is then multiplied by the 22 day work month and at the rate of £7 per hour (or a lesser rate dependent on the information given on the application form); and
• In respect of self employed persons: self employed persons will receive £1,155 calculated in the same manner as full-time inactive employees.

These payments will be exempt from tax and social insurance contributions although employees who are receipt of these measures will be deemed to have made any relevant contributions to both tax and social insurance.

Any payments made by the employer to inactive employees under the Regulations will not need to be registered in the employee’s annual statement (P8 form).

How do we apply?

Applications are made online with a hard copy being signed after the application is made.

A note on offences and anti-abuse provisions

The Regulations provide a number of offence and measures to avoid the abuse of the measures implemented. These include:

• Fines and potential imprisonment for providing false and/or inaccurate information;
• A civil offence which could see the defendant paying the Government 3 times the value of the contributions received;
• Notification obligations are placed on the employer/self-employed persons to provide for repayment of contributions which are over and above the entitlement of the inactive employees – any erroneous payments are to be paid back and it will be for the employer to identify and report the error in payment;
• Where payment to the inactive employee is not possible within 14 days of receipt of the contribution, the employer is under a positive duty to return the contribution to the Government; and
• Where the Director of Employment has reason to believe that an employer is in breach of any provisions, s/he may publish the details of said employer in the Gazette. Publication of identity includes the publication of the details of a corporate body’s director(s), the business name, the nature of the body’s business and other such details.

The above is only a snapshot of the type of questions Verralls is receiving in relation these new Regulations. Whether you are an employer, employee or self employed, we are dedicated to assisting you in any questions or issues you may have.

Please contact us generally at [email protected] or Jonathan Tirado at [email protected].