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London bankers today expressed dismay at Chancellor George Osborne's hike in the bank levy in yesterday's autumn statement for the third time this year. It has once again raised fears that UK banks could move their headquarters overseas and foreign banks scale back their operations in this country.
Osborne raised the rate from 0.078% to 0.088% after admitting the tax would fail to raise the £2.5billion he had targeted for this year. The levy was originally introduced to replace Labour's bankers' bonus tax and was raised both in February and March. Stuart Fraser, head of policy at the Corporation of London, expressed his fury by saying: "A stable tax regime is essential to ensure our international competitiveness is not damaged."
The bank levy will be charged as a percentage of banks' assets on December 31. As banks have shrunk their loan books in response to both the eurozone crisis and tougher regulation the Treasury has realised that its planned take has shrunk.
Figures revealed in the autumn statement show the expected income from the levy for this year is now only £2.1 billion but that it will rise to £2.9billion in 2016.
Fraser added: "This is the third time the bank levy has been increased in a year, which clearly is not conducive to building confidence in the UK's business environment. There are well over 200 foreign banks based in the UK and we need to ensure London is viewed as a competitive centre."
Tony Anderson, banking partner at legal firm Pinsent Masons said: "Banks have been deleveraging in response to the eurozone debt crisis and shrinking balance sheets to comply with new capital requirements. This will have had an impact on the revenues generated from the levy. There must be a concern among banks that the levy may need to increase again if this continues."
Reader views (5)
@pb The bankers already figured out how to avoid that; the 'bonuses' were magically turned into salaries, which is actually what they were in the first place. A 'guaranteed' bonus is not a bonus at all. With these neat little bookkeeping tricks the banks have managed to bring the world financial system to its knees. Let them squeal over their 0.01% tax increase. The biggest problem is, the consumer pays it in the end.
- Richard Eader, London, 01/12/2011 09:54
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Sorry to disagree but Bankers are not the only executives to receive unnecessarily high bonuses. A bonus tax on anything over the amount of the annual salery should be taxed at a much higher rate
- pb, blandford, 30/11/2011 16:46
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these thieves should be taxed to the hilt. Should be made to pay back all the money they have looted
- john lowe, london, 30/11/2011 15:20
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"Public React With Fury at Bankers Destroying Economy."
And another 300,000 job losses in the public sector, that Osborne is asking for - equals a loss of income tax and NH contributions of £2.4 billion to the government. Now, let me think... Does that mean that the hole in the economy will never be cured? I guess so, especially if all 300,000 go on benefits - which would mean the government paying out £2.6 billion in benefits to those it wants out of work. That makes £5 billion loss of dosh in the coffers. Oh wow! Did Osborne make that calculation......? There's more on this on my site johnproblem.com
- john problem, London UK, 30/11/2011 13:38
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A better headline would have been "Bankers React With Fury To Having To Help Clear Up Their Own Mess"
The Bankers are the most parasitic people you could ever meet.
- Rivhard, Hoxton, 30/11/2011 13:03
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