Osborne set to increase bank levy

CHANCELLOR George Osborne could increase the bank levy in his Autumn Statement today to raise a further £2.5bn a year.

Osborne (pictured) announced the levy of 0.075% on banks’ profits in the June 2010 Budget. This was due to rise by the end of the year, but The Times reports that Osborne could announce an increase to 0.078% in the Autumn Statement today.

There is also likely to be a crack down on stamp duty avoidance following recent reports that it is costing £1bn a year in lost revenue.

Richard Mannion, national tax director at Smith & Williamson, said he is not expecting much tax content in the statement. Announcing tax changes “would not fit with the tax policy framework”, he said. The government has announced big changes to rates in the Budget and consulted on other changes to controlled foreign companies rules and research and development credits, for example.

“However, the one exception is on avoidance and revenue protection,” Mannion added. “There is a lot of concern about STDL on expensive properties in London. France cracked down on this three weeks ago and did it simply.”

The change to the bank levy is an exception because it is relatively simple, Mannion said. “But it will affect the banks that have been sensible, rather than those that have lost money,” he added.