Richard Milnes, UK Banking Tax Partner at EY, comments on the Chancellor’s announcement on the bank surcharge:
“With corporation tax now set to rise to 25% in 2023, UK banks will have welcomed the Chancellor’s subsequent announcement to review the 8% bank surcharge this Autumn. The implication from the Chancellor that a 33% tax would be too high for international competitiveness post Brexit is clear, but it seems that banks should still brace themselves for an overall increase in tax on profits from 2023. The proposed timing for legislating the changes may also produce unwelcome volatility in the reporting of banks’ deferred tax positions over the next two years as they face into the change.
“The banking sector will be keen to understand if there will be a formal consultation process ahead of an Autumn announcement and if it will extend into broader tax policy, notably to include a review of the current bank levy.”