City bank chiefs warn Healey that hiking bank taxes could drive financial businesses out of the UK
John Healey and Andy Burnham share a pint. The IFS has warned Chancellor John Healey his 28 October Budget risks becoming a "work of fiction" without credible measures to plug a £35 billion spending gap.UK banks already pay tax equivalent to 46 per cent of profits, against 28 per cent in New York, PwC figures show — as Lloyds and rivals urge John Healey to hold fire ahead of the October 28 Budget.
The bosses of the UK's biggest City groups have sent a letter to Chancellor John Healey demanding he back off plans to raise bank taxes in the October 28 Budget, warning higher levies could push capital, people and businesses to rival financial hubs abroad. UK Finance chief executive David Postings and CBI director-general Rain Newton-Smith are among those who signed the letter, joined by TheCityUK, the City of London Corporation and the Association for Financial Markets in Europe. The letter warns that Britain's financial sector already bears a heavier tax burden than key international competitors, including a bank corporate tax surcharge of 3% and a separate bank levy. Healey faces a £35bn black hole in his spending plans ahead of the Budget, fuelling speculation that banks are in his sights.
The letter warns a higher bank tax burden 'may not necessarily generate higher receipts' if businesses simply relocate.
Separately, Healey has dropped Labour demands to align capital gains tax with income tax after Treasury officials described the plan as 'bat s**t crazy'.
The Cabinet Office has been hit with a £38m bill of its own over tax blunders, heaping further pressure on the Chancellor ahead of Budget day.
