BusinessCompany NewsCredit turmoil slashes £2.5bn off banks corp tax

Credit turmoil slashes £2.5bn off banks corp tax

The losses suffered by Britain’s biggest banks as a result of the global credit turmoil will slash £2.5bn from public finances

Writedowns reported in recent weeks by the
Royal Bank of Scotland, HBOS
and Lloyds TSB are estimated to cut more than £2.5bn off the three banks’
combined tax bills, most of which is expected to come at the expense of British
taxpayers.

Based on estimates compiled by the Financial Times, the figure
represents more than 5% of the HM Treasury’s forecast for corporation tax
receipts in the 2007-08 financial year and highlights the dependence of the
public finances on the banking industry, which has accounted for a growing share
of the tax base in recent years.

In 2005-06, the most recent year for which a breakdown is available, the
banking, finance and insurance sectors paid corporation tax of £11.6bn – about a
quarter of the total.

The damage suffered by UK banks from market turmoil will be highlighted this
week when two of Britain’s biggest banks, HSBC and
Barclays,
deliver their first quarter results and Barclays as expected announces
writedowns of £1.4bn before tax.

Further reading:

£5bn RBS writedown expected

Mortgage giant braces itself for bumper write down

Read
the Financial Times story

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

3m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

7m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

7m Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

10m Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

10m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

10m Emma Smith, Managing Editor