The UK government has introduced a £2.5bn
annual bank levy, designed to encourage less risky funding and
complementing the wider agenda to enhance
financial stability.
The levy will apply to all UK banks and to the
more than 200 overseas banks operating in the UK.
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The British Bankers’ Association (BBA) said
that UK banks are committed to “playing their part in restoring the
UK economy – and that includes helping to meet the greater demands
on the Exchequer.”
It said: “We will work with the Treasury to
ensure the final levy also meets the aim of maintaining the
UK’s position as the world’s financial centre while generating
additional tax revenues.”
The trade body is, however, raising questions
regarding how the levy would interact with taxation in other
countries.
“Until this is clearer, some banks could be
taxed multiple times by multiple jurisdictions on the same
activities. There is also no international consensus on how
banking activities should be taxed: the G20 members still hold
very different views.”
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By GlobalDataA spokesman for Barclays said that the UK bank
supported the government reforms. It said: “We welcome the
government’s efforts to ensure that the bank levy is implemented in
a way that allows banks to continue to support economic
growth.”
Announcing the new bank tax, financial
secretary to the Treasury Mark Hoban said: “We have consulted on
the design of the scheme so that it achieves two
objectives: firstly, ensuring that banks make a fair
contribution in respect of the potential risks they pose to the UK
financial system and wider economy. Secondly, the final
scheme design incentivises banks to make greater use of more stable
financial sources, such as long term debt and equity, working
with the grain of our wider reform programme.”
