Finance chiefs warn Healey against raising bank tax

Summarised from 3 outlets · Updated 9 Oct, 17:37 · Archive

City industry leaders have urged the Chancellor not to increase taxes on banks in the forthcoming Budget.

Top finance industry chiefs have written to Chancellor John Healey expressing concern that raising taxes on the banking sector in the forthcoming Budget could drive businesses and capital out of the UK. Signatories include the chief executives of UK Finance, the CBI, TheCityUK, the City of London Corporation and the Association for Financial Markets in Europe.

The letter argues that UK banks already face a higher tax burden than key international competitors. Total taxes on UK banks amount to 46 per cent of profits, compared to 42 per cent in Amsterdam, 39 per cent in Frankfurt, and 28 per cent in Dublin. Banks are currently subject to both a bank corporate tax surcharge at a rate of 3 per cent and a bank levy on certain equities and liabilities.

The industry bodies warn that further tax increases could weaken investor confidence, reduce the availability of finance and protection for households and businesses, and risk undermining economic growth. They argue that a higher tax burden may not generate higher tax receipts if capital, people and businesses relocate to other financial hubs. The letter urges that tax decisions be assessed not simply by short-term revenue but by their effects on investment, competitiveness and firms' capacity to support the wider economy.

How it is being reported

• Bank tax raid could spark exodus, City warns HealeyBritain faces an exodus of talent, business and capital if Labour increases bank taxes, the City has warned the Chancellor.This is Money · 9 Oct, 17:34
• City bosses warn Healey hiking bank taxes could drive business out of UKLobbying from industry groups has stepped up in recent weeks ahead of the autumn Budget statement.Independent Business · 9 Oct, 16:26
• City chiefs warn Healey bank tax hike could drive businesses out of UKTop finance industry chiefs have warned the Chancellor that hiking taxes on the banking sector in the forthcoming Budget could drive businesses and capital out of the UK. Bosses of the City’s biggest industry bodies – including UK Finance, TheCityUK and the CBI – have written to John Healey calling for him to avoid raising [...]City AM · 9 Oct, 15:24

In this story: John Healey · UK Finance · CBI · TheCityUK · City of London Corporation · United Kingdom

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