Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Top Stories

Banks brace for tax hit to help plug UK’s budget gap

Published : , on

By Iain Withers and Lawrence White

LONDON (Reuters) -British banks are bracing for a potential tax hit to their profits as the government scrambles to plug an estimated 40 billion pound ($45 billion) hole in its finances.

A source familiar with the British government’s plans said new finance minister Jeremy Hunt was reviewing the current surcharge on bank profits and would confirm the level when he delivers his medium-term fiscal plan on Oct. 31.

Governments across Europe have been weighing whether to slap new taxes on banks to help pay for state support packages for citizens struggling with soaring food and fuel prices, with both Spain and Hungary proposing one-off levies.

Britain already imposes a levy on bank balance sheets and an 8% surcharge on profits above the 19% rate of corporation tax, although this surcharge was set to drop to 3% next year.

Hunt has not yet decided whether to scrap the proposed cut to the bank surcharge, the Financial Times reported on Tuesday, fuelling investor concerns about the potential tax burden on lenders.

“There is a competition angle here which is that as with all tax if you push it too far, you could lose banking activity to other markets and your tax base goes down,” said Richard Milnes, bank tax partner at EY.

Shares in British lenders fell as much as 6% in early trading on Wednesday following the report.

Shares in Lloyds and NatWest fell as much as 4% and 5% respectively, while challenger Virgin Money slid 6%. The stocks later pared some of their losses but were still underperforming the wider FTSE index, which was flat on the day.

“It’s a source of frustration that banks in the UK are always perceived to be an ATM by the government,” said Alan Custis, head of UK equities at Lazard Asset Management.

If the surcharge were to be revised to around 5% to 8% instead of 3%, however, banks could cope, given their expected strong profits in the next few years, he said.

Senior bankers in Britain had been wary of the potential for extra taxes, although one senior industry source said they had had no dialogue so far with Hunt’s new team.

“We urge the government to consider the surcharge very carefully and not put at risk the competitiveness of the UK’s banking and finance industry,” a spokesperson for bank lobby group UK Finance said.

($1 = 0.8893 pounds)

(Reporting by Iain Withers and Lawrence White, additional reporting by Sruthi Shankar, editing by Sinead Cruise, Kirsten Donovan and Bernadette Baum)

Jesse Pitts has been with the Global Banking & Finance Review since 2016, serving in various capacities, including Graphic Designer, Content Publisher, and Editorial Assistant. As the sole graphic designer for the company, Jesse plays a crucial role in shaping the visual identity of Global Banking & Finance Review. Additionally, Jesse manages the publishing of content across multiple platforms, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post