Osborne considering further taxes on UK banks

Chancellor George Osborne has hinted that UK banks might face further tax bills, over and above the £2 billion levy announced in the emergency budget.

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by Matthew Goodburn on Jun 24, 2010 at 08:15

Osborne considering further taxes on UK banks

Chancellor George Osborne has hinted that UK banks might face further tax bills, over and above the £2 billion levy announced in the emergency Budget.

Reports in the Financial Times said that Treasury aides had revealed that the £2 billion bank levy to be raised against bank balance sheets would be kept under review, and could rise to mirror a more aggressive bank levy which US president Obama is currently trying to drive through the US Senate.

Prime minister David Cameron is expected to expand on the idea of a separate tax on banks' profits and bonuses when he meets his G20 colleagues in Toronto later this week.

Osborne has chosen to set the bank levy at 0.07% of banks' covered assets in 2012, which is expected to raise some £2.5 billion a year.

The level is less than half the 0.15% proposed by the 'Obama Tax', which is currently facing stiff opposition in the US Senate.

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5 comments so far. Why not have your say?

When will this 'Bank Bashing' come to an end? These tedious ongoing threats and innuendos are stifling the value of the shares of the part nationalised banks RBS and Lloyds. There is still too much uncertainty on what the Government will do and the markets hate uncertainty. Cameron needs to get off the pot and make a final decision regarding milking the banks. Stability will then return to the markets, bank shares will increase in price and the Government will then be able to cash in their shares at a profit. QED.

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It was not the banks that got us into this mess in the first place, it was there was not enough regulation. It astounds me how people can borrow more money than their property was worth, and more so self certificated mortgages, without proof of earnings.

We should, go back to pareto, 80% of the problems have been caused by the 20%.

Mortgages should only be allowed for max 80% of valuation.

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Of course it was the banks and rating agencies (mostly in the USA), who caused this problem!! Why are they not pursued (reckless behaviour--like the US versus BP), for causing global recession and costing us billions? When bailouts have cost hundreds of billions, not to mention the repercussions, then the prospect of a tax of only a few billion per annum, seems totally inadequate.

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What is raison d'etre of taxing the banks? Why not let them pay a dividend and the taxpayer will benefit.

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edward bennett

Jun 24, 2010 at 15:01

In his budget delivery the Chancellor emphasised fairness. The general concensus seems to indicate that the poorer sections of the community will suffer most. The levy on the banks should therefore be much higher than the proposals. I look forward to an additional levy to rectify the inbalance.

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