THE CHANCELLOR could hit Britain’s banks in next month’s Autumn Statement with a hike in the annual levy they pay to the Treasury.
George Osborne is keen to shake off perceptions he is reducing the tax burden on banks and maintain the £2.5bn yield from the industry. Should the move go ahead, it will be the third increase since it was introduced two years ago.
A senior Treasury source told Sky News it was “logical” to expect the government to “at least maintain” the take from the tax on balance sheets.
Osborne said in his last Budget that the levy would rise to 0.105% from January 2013 “so that banks will not benefit from additional corporation tax cuts and the levy will raise £2.5bn a year”.
There has been suggestion from some quarters that the rate could rise further in January and again a year later as the biggest banks attempt to shrink their balance sheets in order to fall within capital rules.
Other options open to the chancellor include a new tax on bonuses in addition to the levy as he hopes to appear tough on banks.
Bankers have criticised the levy, though, suggesting it punishes banks that depend on wholesale funding such as HSBC and Standard Chartered, which have not required a taxpayer rescue.
Osborne announced the first increase in the rate of the levy in February last year, with the take growing from £1.7bn to £2.5bn.
Freelancers and micro-businesses still need more information about the government’s plans to make tax digital
New dividend tax is an attack on small business owners and is acting against the best interests of the UK economy, warns Top 50 accountants, Bishop Fleming
The Treasury is consulting on how businesses remunerate their staff to assess whether companies are artificially using benefits in kind to avoid tax
HMRC is consulting on proposals to clarify the tax treatments of general and limited partnerships