Autumn Statement 2013: Chancellor hikes bank levy
Thursday 05 December 2013
British banks will be called on to provide an extra £200 million in bank levy this year and another £400 million in 2015 and after.
Bankers questioned if this was wise when the City of London is already fighting on several fronts to retain key international banks in the City with th threat that the UK cvould leave Europe.
The Chancellor, who lifted the levy rate in his last Budget to 0.142 per cent of banks’ risk weighted assets, today raised that by another 10 per cent to 0.156% from January 2014, raising £2.7 billion in 2014/15 and £2.9 billion each year from 2015/16.
The Chancellor said: “The country stood behind the banks in the crisis, and now it is right that they support the country in recovery.”
The scope of the tax will also be widened in ways that the Treasury has previously held consultations on. These changes, which broaden the range and scope of the levy, close certain loopholes and will come into force at the start of 2015.
Matthew Barling, partner at accountants PWC, said: “Each bank levy rate rise is a double hit for the UK’s competitiveness – it makes the UK a less competitive location for banking business and it makes UK headquartered banks less competitive when doing business overseas. Seven rate rises in three years sends a stark message regarding whether Britain really is open for banking business.”
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