BRITISH BANKS have been slapped with a £3.5bn tax hit, following George Osborne’s decision to restrict the offset of carried forward losses to 50% of a bank’s annual profits.
The measure – which will kick in from 1 April 2015 – includes an exemption for losses incurred in the first five years of a bank’s authorisation.
Chris Sanger, EY’s head of tax policy, said the banks had “proved again to be a source of significant funds – almost £3.5 billion over the budget period – with restrictions on their ability to utilise the losses of the past, giving the chancellor a war chest to spend elsewhere”.
Kevin Hindley, MD of Alvarez & Marsal Tax had similar sentiments: “It’s disappointing that the chancellor has yet again taken the easy option of going after the politically soft target of the banks.
“It’s against the fundamental principles of the free market to negatively discriminate against one industry group compared to others.”
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