£40 billion extra tax bill for banks will harm lending
03 September 2015
Britain’s banks will have been hit by an extra £40 billion tax bill over the decade 2010 to 2020, which will harm their ability to lend to businesses and create new jobs, the British Bankers Association (BBA) said on 14 July.
In July, the Chancellor, George Osborne, announced that whilst the current Bank Levy rate will reduce over the next six years, he was introducing a new Bank Corporation Surcharge on banking sector profits, placing an additional burden on lenders. The new surcharge will tax banks 8% on their profits in excess of £25m from next year and is the fifth new bank tax introduced in the past five years.
The Bank Levy was introduced in 2011 in response to the financial crisis of 2007-2009.
The Chancellor has the tricky task of trying to ensure London remains an attractive place for banks to be based, while also satisfying public demand that the banks pay for the costs of the crisis.
The BBA is concerned that this extra tax on top of the tens of billions of other taxes that banks pay will make it harder for banks to lend to businesses and create new jobs.