Under proposals reportedly considered by Chancellor John Healey ahead of the Budget, British banks could face additional taxes of billions of pounds, though the Treasury has not confirmed any plans. One option is raising the corporation tax surcharge, which could bring in about £2 billion a year; another is temporarily restricting banks' use of historic losses to offset current profits, estimated at about £1 billion annually. Banks currently pay a 25% corporation tax rate plus a 3% surcharge, and restoring the earlier surcharge would lift the combined rate to 33%. NatWest and Lloyds shares fell more than two per cent in early trading, while UK Finance warned that higher taxes could weaken competitiveness and discourage investment and job creation. The Government's plans are expected to become clearer when the Budget is delivered on October 28.
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