UK bank tax will be temporary and below 8%, Bloomberg reports
The levy will last 15 months and is aimed at funding household energy bill support, while banks warned of higher borrowing costs.
- On Wednesday, Chancellor John Healey announced a temporary increase in the bank surcharge from 3 per cent to 6 per cent in the Budget, aiming to fund household energy support for British households.
- Banking stocks rallied as the increase remained well below the feared 8 per cent threshold, with Lloyds, Barclays, and NatWest shares rising at least 2 per cent each.
- This temporary 15-month measure reverses the 2023 strategy, when the Tories reduced the surcharge from 8 per cent to 3 per cent while raising corporation tax to 25 per cent.
- Industry bodies warn this hike could weaken Britain's global position, as banks currently face a 46.5 per cent tax rate, potentially increasing financing costs for businesses and borrowers.
- The Treasury deemed this measure necessary to address diminishing fiscal headroom while avoiding personal tax increases, positioning the temporary levy as targeted revenue to fund energy relief.
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10 Articles
Lloyds, Barclays and NatWest shares jump as Healey softens bank tax blow
UK bank shares rallied after Chancellor John Healey announced a smaller and shorter-lived tax increase on the sector than investors had feared. Shares in Britain’s biggest banks jumped on Wednesday… The post Lloyds, Barclays and NatWest shares jump as Healey softens bank tax blow appeared first on London Business News
Healey’s Bank Tax Hike to Be Less Severe Than Lenders Feared
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Barclays and Lloyds shares surge on reports bank tax will be 'lower than expected'
Shares in Britain’s banking giants surged ahead of John Healey’s maiden Budget after reports the Chancellor would raise taxes on the sector by a lower rate than originally expected. The UK’s lenders have been bracing for a tax raid despite defensive lobbying from City chiefs. Healey is expected to increase the banking surcharge that sits [...]
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