PracticeConsultingBrown set to pounce on banking profits

Brown set to pounce on banking profits

Gordon Brown could balance the Exchequer's books with a £10bn windfall tax on banking profits, according to a Big Four tax partner.

Link: Brown searches for ‘quick and easy’ fix

Derek Jenkins, tax and legal services partner at PricewaterhouseCoopers, told Accountancy Age that the chancellor could follow in Geoffrey Howe’s 1981 Budget footsteps and impose an opportunistic tax of around 5% on profit-making banks. This comes after HSBC, Royal Bank of Scotland and Lloyds TSB announced £6.8bn, £6.2bn and £4.3bn 2003 pre-tax profits respectively.

‘The banks would be deeply upset but they probably need his cooperation more than he needs theirs,’ he said.

The chancellor has a history of breaking tradition and introduced a windfall levy on 30 privatised public utility companies in his inaugural Budget in 1997. Jenkins also indicated that a levy could be a potential catalyst towards Gordon Brown becoming the next prime minister.

‘Now’s the time when his campaign really has to kick off. He’s got to show that something he did is capable of making him win the next election,’ added Jenkins.

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