Chancellor John Healey is reportedly planning to raise taxes on Britain's banks in his 28 October budget to offset the hit to public finances from the Middle East war, according to the Guardian. One option under discussion is reversing Jeremy Hunt's cut to the bank surcharge, which would raise more than £2bn a year, and industry sources expect the surcharge to rise from 3% to 8%. The four largest lenders generated £200bn in pre-tax profits over five years, and the TUC has called for a 16% rate that could raise £24bn over four years. Banks have lobbied against the move, warning it could push them to shift staff and business abroad, while specialist lenders such as Revolut and Shawbrook want the surcharge threshold raised from £100m to £500m.
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- John Healey poised to raise taxes on banks in budget
Chancellor John Healey is reportedly set to raise the bank surcharge from 3% back to 8% in his 28 October budget, to offset the public finance damage from the Middle East war. The move could raise about £2.25bn a year according to TUC analysis, as rising borrowing costs erode the £24bn headroom Rachel Reeves had built. HSBC, NatWest, Barclays and Lloyds generated £200bn in pre-tax profits over five years, yet bank lobbyists warn higher taxes could push staff and business abroad, and JP Morgan's Jamie Dimon had threatened to scrap a £3bn London headquarters. The TUC wants a 16% rate, while Revolut and Shawbrook seek to lift the surcharge threshold from £100m to £500m. The IMF has urged Healey to stay the course on deficit reduction.
- Bank shares drop as John Healey prepares to raise taxes on the banking sector in the budget – business live
According to the Guardian, Chancellor John Healey is poised to raise tax revenue from UK banks in the 28 October budget to repair public finances damaged by the Middle East war. One option under discussion is reversing Jeremy Hunt's cut to the bank surcharge, which could raise upwards of £2bn a year by lifting the surcharge from 3% to around 8%. The industry trade body UKFinance warned that further bank tax increases would weaken competitiveness, discourage investment and job creation. Lloyds and NatWest shares fell around 2%, far less than the roughly 6% drop expected if the surcharge rose by 5 percentage points, and one analyst said much of the bad news is already priced in. Elsewhere, South Korea's Kospi fell 14.5% in its worst week since October 2008 as investors worried about borrowing, spending and profitability at AI companies.
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