Business · Companies · 4 hrs ago
Healey faces calls to drop proposed £2bn bank tax rise
Chancellor John Healey is weighing a higher tax on banks in his first Budget, due on October 28.
The proposal would reverse a 2023 cut to the bank surcharge on corporation tax, from 8% to 3%.
Reversing the cut could raise about £2bn a year for the Treasury.
Former Bank of England chief economist Andy Haldane urged the Government not to increase bank levies, saying higher taxes could weaken growth.
The CBI also warns the move could hurt Britain's competitiveness.
Healey has said banks are important to the economy and has stressed that he wants to maintain market confidence and fiscal discipline.
The final decision is expected in the Budget as Healey completes its details.
John Healey faces calls to abandon a proposed £2 billion-a-year tax rise on banks.
The increase could come from reversing a cut to the bank surcharge on corporation tax from 8% to 3%.
Former Bank of England chief economist Andy Haldane urged the Government not to raise levies on banks.
The Confederation of British Industry warned that a bank tax increase would hurt Britain’s competitiveness.
Healey is due to present his first Budget on October 28 and has said he will stick to fiscal discipline.
- Who
- Chancellor John Healey faces calls from former Bank of England chief economist Andy Haldane and the CBI to drop the proposed tax rise.
- What
- The proposal could raise the bank surcharge on corporation tax from 3% to 8%, bringing in about £2 billion a year.
- When
- The calls came before Healey’s Budget, due on October 28.
- Where
- The proposal concerns banks in the City of London and the UK.
- Why
- Haldane warned that tax rises would be bad for growth. The CBI said the move would hurt Britain’s competitiveness.
This story does not have two clearly opposing sides.
Haldane and the CBI made calls against a proposed bank tax rise ahead of Healey’s Budget.
Healey is due to present his first Budget.
- Proposed annual tax rise
- About £2 billion
- Bank surcharge before cut
- 8%
- Bank surcharge after cut
- 3%
- Budget date
- October 28, 2026
3 sources
What people are saying
My hope is that this is a Budget for business and for bond markets, in other words the Government signals voluntarily restraint on Government spending and chooses voluntarily not to raise taxes on households or on businesses
Or put in a nutshell, I expect a Budget for the backbenchers rather than for business or the bond markets.