Sunak to cut bank profits tax surcharge to help boost London’s competitiveness
Rishi Sunak plans to more than halve the tax surcharge on bank profits to help boost London’s competitiveness as a global financial centre.
The Chancellor will announce a cut to the surcharge from 8 per cent to 3 per cent from April 2023 in his Budget next week, according to the Financial Times.
It comes ahead of a hike in corporation tax from 19 per cent to 25 per cent in 2023, which Sunak had cautioned risks making ‘the taxation of banks uncompetitive’.
Banking boost: The Chancellor is expected to announce a cut to the surcharge on bank profits from 8 per cent to 3 per cent from April 2023 in his Budget next week
Banks pay 27 per cent tax on profits, of which 19 per cent is corporation tax and 8 per cent the bank surcharge.
They would see their overall corporation tax charge surge to 33 per cent in 2023, if the surcharge was not reduced.
But the expected reduction in the top-up tax would see their overall charge edge up to 28 per cent.
It follows comments by City minister John Glen last month flagging that the surcharge could be cut as he vowed that Britain’s financial services sector would enjoy “competitive tax rates”.
The bank tax was introduced by former chancellor George Osborne on profits over £25million in 2015.