Posted on October 20 2021
As the FT notes this morning:
Rishi Sunak will slash a tax surcharge on bank profits by more than 60 per cent in next week’s Budget in an effort to keep the City of London competitive on a global scale in the wake of Brexit.
The chancellor will cut the surcharge from 8 per cent to 3 per cent from April 2023.
This surcharge increases the rate of corporation tax paid by banks from the 19% currently due to 27% at present, which will fall to 22% if Sunak's plan goes ahead.
What's the cost? It is hard to say precisely as the existing corporation tax statistics do not show the sum paid by banks separately, but PWC suggest that the total paid may be £2 billion. That would put the cost of the cut at £1 .2 billion.
The cut in Universal Credit by cancelling the £20 a week uplift supposedly saved the Chancellor £6 billion.
I am sure that all the families suffering a £20 decrease in their Universal Credit will be pleased to know that £4 a week of that sum will be redirected to banks to keep them competitive. That's what these figures imply.
I doubt that the thought that they're helping out bankers is going to provide much comfort to all losing their benefits this winter.