Senior banking executives expect John Healey to raise taxes on bank profits in the Budget, with the sector already facing calls to pay more after strong earnings this year.
01Summary
- 01The biggest four banks made about £15bn profit in the first six months of this year.
- 02UK banks and building societies currently pay a 3% surcharge on top of the 25% corporation tax rate, plus a levy on their balance sheets.
- 03The bank levy raised £1.4bn last year and the surcharge raised a further £1.2bn.
- 04Returning the surcharge to its previous 8% level could raise around £2bn a year, while a pause on using past losses could raise about £1bn a year.
- 05Sir Philip Augar said there was room for a moderate tax rise, while UK Finance warned higher bank taxes would weaken competitiveness and discourage investment.
02Why it matters
Any rise would affect a major UK industry that already contributes heavily to the Treasury. It could also shape lending, investment and the government’s wider growth plans.
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