Banks: Taxation

(asked on 12th October 2015) - View Source

Question to the HM Treasury:

To ask Her Majesty’s Government what is their assessment of the potential impact of the tax on banks introduced in the summer budget on competition and barriers to new entrants to the sector.


This question was answered on 26th October 2015

The government has consistently taken action to promote competition in the retail banking sector, including reducing the cost and complexities of authorisation, creating a new Payment Systems Regulator to ensure fair access to payment systems, and introducing the new Current Account Switching Service.


The government does not believe the bank corporation tax surcharge will have an adverse impact on these measures’ effectiveness nor competition more generally in the retail banking sector.


The design of the surcharge includes an allowance for the first £25 million of a banking group’s profit. This excludes smaller banks altogether and ensures that those within scope of the charge only pay in respect of the profits they make in excess of £25 million, at a rate that will be the lowest in the G7.

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