Business · Markets · 1 hr ago
UK Chancellor John Healey Set to Raise Taxes on Banks
UK Chancellor John Healey is expected to raise taxes on banks in the 28 October budget.
The proposed change would affect banks across Britain.
It is likely to involve increasing the bank surcharge, a tax charged on top of the standard corporation tax rate.
The government is seeking revenue to support households with living costs and stabilize public finances.
One option under discussion could raise the surcharge from 3% to 8%, though the final plan has not been confirmed.
The banking industry warns that higher taxes could weaken its competitiveness and discourage investment and jobs.
The budget on 28 October will set out the decision.
John Healey is set to raise taxes on UK banks in his 28 October budget, according to the Guardian and Bloomberg.
The increase is likely to involve raising the bank surcharge, which is charged on top of corporation tax.
The Guardian reported that reversing cuts to the surcharge could raise more than £2bn a year.
Bloomberg said the revenue would fund cost-of-living support and help stabilize public finances, while the Guardian cited damage to public finances from war in the Middle East.
UK bank shares fell after the reports, with Lloyds down about 1.9% and NatWest down 1.6% at the start of trading.
- Who
- UK Chancellor John Healey and Britain’s banks.
- What
- Healey is set to raise taxes on banks, likely by increasing the bank surcharge.
- When
- In the 28 October budget.
- Where
- The United Kingdom.
- Why
- Bloomberg says the revenue would fund cost-of-living support and stabilize public finances. The Guardian says Healey is seeking to address damage to public finances from war in the Middle East.
UK government
UK Finance
Tax increase
UK government
Healey is set to raise taxes on banks in the budget.
UK Finance
UK Finance warned that further increases in bank taxes would weaken competitiveness and discourage investment and job creation.
Purpose and impact
UK government
The tax increase is intended to raise revenue for public finances and, according to Bloomberg, cost-of-living support.
UK Finance
UK Finance said higher bank taxes would work against the government’s ambition to deliver growth in every postcode.
Healey praised banks, saying they were hardwired into the UK’s economic fabric.
Reports that Healey was set to raise bank taxes were published, and UK bank shares fell at the start of trading.
Healey is due to present the budget in which the tax increase is expected.
- Expected budget date
- 28 October
- Potential surcharge increase
- From 3% to 8%, according to industry figures cited by the Guardian
- Estimated annual revenue
- More than £2bn if cuts to the surcharge are reversed
- Lloyds Banking Group shares
- Down about 1.9% at the start of trading
- NatWest shares
- Down 1.6% at the start of trading
3 sources
What people are saying
People too often see them as big, distant financial institutions, when they are hardwired into the economic fabric of this country and our future prospects.
further increases in bank taxes would weaken competitiveness, discourage investment and job creation, and work against the government’s ambition to deliver growth in every postcode