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20 Oct 2010
The chancellor has warned that the financial sector must abide by the letter and the spirit of the law when it comes to paying tax.
In announcing a permanent levy on the sector in the comprehensive spending review, George Osborne said that the banks would have to pay their fair share into the UK's coffers.
"Those with the broadest shoulders should bear the greatest burden. Those with the most should pay the most, including our banks," Osborne said.
"We neither want to let banks off making their fair contribution, nor do we want to drive them abroad," Osborne added.
The British Bankers Association said the announcement of a permanent levy was not unexpected, but warned that financial institutions - particularly overseas banks - would now be considering whether to stay in the UK.
"Financial services currently contribute around £24bn in taxes every year," the BBA said.
"To remain competitive we need to ensure UK policies are in step with those elsewhere.
"Decisions taken today will have an effect on the whole industry and particularly on overseas banks operating in the City: they are likely to look to their tax bills and what is to be paid here and at home when deciding on their future plans."
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Whenever you see a comment by a representative of the BBA responding to actual or implied criticism of the banking industry, my suggestion is to ignore it - this applies particularly to chief executive Dame Angela Knight
The BBA are more partisan and unreasonable in defence and on behalf of their members than Red Robbo was in defence of the Trade Union members at British Leyland, and about as detached from reality.
Posted by: roger, 21 Oct 2010 | 00:00