Double taxes give City a wake up call

CHANCELLOR George Osborne’s regular bank levy had been anticipated by bulge bracket firms, but City figures nonetheless urged the government to clarify its geographic scope.

In particular, banks and accountants were concerned at the prospect of double taxation if France and Germany bring in their own tolls.

Rod Roman of Ernst & Young said: “A levy system may seem superficially attractive, but in years to come it could become an example of the law of unintended consequences.”

Deloitte questioned whether a tax of seven basis points on banks’ liabilities would be material enough to make them move to less risky funding profiles, but said an estimated annual fee of £300m per bank was “another significant cost to be borne.”