Banks face the prospect of a 33 per cent corporation tax rate following Jeremy Hunt’s reversal of the ‘mini budget’ tax cuts
Banks face the prospect of a 33 per cent corporation tax rate following Jeremy Hunt’s reversal of the ‘mini budget’ tax cuts.
Lenders were understood to be in talks with the Treasury yesterday after the new Chancellor made no mention of the so-called bank surcharge, which had been due to fall when corporation tax rose.
After the 2008 financial crisis, lenders were hit with the surcharge tax of 8 per cent on top of their corporate tax bill. As recent Chancellors have fiddled with the base level of corporation tax, they have tried to keep the burden on the banks even by also adjusting the level of the bank surcharge.
But Hunt made no mention of the surcharge in his statement yesterday as he U-turned on Kwarteng’s policy to keep corporation tax at 19 per cent.
This could mean banks face a rise in corporation tax to 25 per cent, and a surcharge of 8 per cent, taking the total tax rate to 33 per cent. A Treasury spokesman said the department was ‘acutely aware’ of the pressure this could place on lenders.
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