Banks say Healey is planning Budget tax raid on their profits

Senior banking executives expect the sector to be targeted in Chancellor John Healey’s Budget in two weeks, although he has not ruled out a tax increase. The UK’s four largest banks made around £15bn in profit in the first half of the year, while trade body UK Finance says further taxes would harm competitiveness, investment and job creation. Banks currently pay a 3% surcharge on top of the 25% corporation tax rate, as well as a levy on their balance-sheet assets; restoring the surcharge to 8% could raise about £2bn a year. Another proposal is to temporarily suspend banks’ ability to offset past losses against profits, potentially raising an estimated £1bn a year.