The chancellor, Rishi Sunak, is mulling a having of the tax surcharge on bank profits in next week’s Budget to help boost the City’s competitiveness as a global financial centre post-Brexit.
Sunak will cut the surcharge from 8% to 3% from April 2023 in his October 27 Budget, according to the usually well-informed Financial Times.
That will help offset a rise in corporation tax to 25% from 19% in 2023, which might have added to problems for the UK’s banks in dealing with the new landscape post-Brexit.
Banks currently pay 27% tax on profits, of which 19% is corporation tax and 8% the bank surcharge, but after 2023 the tax take would rise to 33% without the surcharge adjustment.
City minister John Glen flagged the change last month adding that the current City bonuses imposed at the start of lockdown would also be monitored to avoid a drain of talent away from the UK.
Another report that Sunak will extend the loan support programmes that were introduced at the start of the coronavirus lockdown.
Budget speculation is now in full swing and here are some of the suggestions leaked so far that might be in the chancellor’s speech next Wednesday.
- An online sales tax at 2% split between purchases and deliveries
- A 5% cut to the 5% rate of value-added tax on household energy bills
- Reduction in bank charge to 3% from 8%
- Coronavirus loan support programme extended
- Chancellor is dealing with a GBP372bn deficit already