British banks are set to pay an extra £800 million in taxes this year, as the government takes a
tougher stance on financial institutions, and pushes to curb bonuses and encourage more business
lending.
The government has said it will impose the full level of a planned bank tax in 2011, instead of
introducing the tax on a phased basis.
The total tax levied from banks this year is expected to be around £2.5 billion. The taxes will apply
to the global balance sheets of UK-based banks like RBS and Lloyds, as well as the UK operations of
foreign banking institutions, such as Germany’s Deutsche Bank and the American bank Goldman
Sachs.
The government had originally planned to raise around £1.7 billion this year, before implementing
the full level of taxation in 2012.
Chancellor of the Exchequer George Osborne said: “That (extra 800 million pounds) is a substantial
sum of money that will help the government and help Britain deal with its budget deficit.”
In an interview with BBC radio, he also added: “I’m still confident we can secure a deal with the
banks on seeing an increase in lending to small businesses and see that bonuses are lower this year
than last year.”
The Treasury has said it expects banks to make what it calls a “fair contribution” to mitigate the
potential risks they present to the nation’s economic stability.
