CSR: Permanent tax on banks to be introduced
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Chancellor George Osborne will reveal plans tomorrow to introduce a permanent tax levy on banks.
In his Comprehensive Spending Review he says he understands the public anger that banks were so appallingly regulated over the past decade.
He says so far only four out of the fifteen major banks have signed up to its pledge to crack down on tax avoidance.
But he says he does not want to drive the banking sector abroad, due to the number of jobs it contributed to the economy.
The government is taking forward its announcement in the Budget of a Bank Levy as an additional and permanent tax on the industry and will publish draft legislation tomorrow, following a consultation with industry over the summer.
Final legislation will follow before the end of the year. Once fully in place, the government expects the levy to generate around £2.5bn of annual revenues, higher in net terms than the previous government’s payroll tax.
It says working with international partners, the government is committed to taking forward work on a Financial Activities Tax on profits and remuneration.
It says to ensure that banks make a fair and growing contribution to the public finances as the economy recovers, the government will continue to monitor tax receipts from the banking sector.
The government has asked HMRC to work with the banking sector to secure their adoption and implementation of the Code of Practice on Taxation by the end of November.
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