Banks hit out at Osborne fiddling with levy

Tim Wallace
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THE BANK levy puts Britain’s lenders at a competitive disadvantage to other countries, the British Bankers’ Association has told George Osborne.

The group also argue that the chancellor’s constant fiddling with the tax is damaging as banks cannot predict how much they will pay over.

The charge is levied on banks’ balance sheets, taking 0.156 per cent of lenders’ liabilities. As a result it hits all banks regardless of the profits or losses they make, and has been hiked to make up for firms shrinking.

“The bank levy rate has been increased eight times since the levy was first announced at budget 2010, and many of those increases have been implemented with minimal advance notice,” said the BBA.

The latest hike, at the Autumn Statement, replaced the increase announced in the Budget before the hike had even come into force.

“The frequency of the rate change has not resulted in a stable tax environment for the banking industry and is inconsistent with the government’s desire for the UK to have a competitive, stable and predictable tax regime for business.”

It added that few other countries have a levy at all, damaging the UK’s position as a financial centre.