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City lobby group presses Sunak to scrap bank tax

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The City’s chief lobbying group has called on Chancellor Rishi Sunak to scrap the bank surcharge to reinforce the UK’s leading role as a global finance hub.

TheCityUK has demanded Sunak remove the eight per cent levy on banks’ profits at the upcoming budget and spending review on October 27.

The lobby group urged the Chancellor to make the bank tax regime more welcoming to strengthen the City’s competitiveness compared to its global rivals, such as the US, Germany and the Netherlands.

Reforming the bank surcharge has been touted as part of Britain’s post-Brexit overhaul of its financial services sector in a bid to cement the City’s position as one of the globe’s top financial centres. 

Sunak announced the government was reviewing the bank surcharge at the budget in March to make sure that “rates of UK taxation are competitive with major competitors.” It is due to publish its results in the autumn.

Miles Celic, chief executive at TheCityUK, said: “The future of the UK’s status as a world-leading international financial centre rests on a vision based on openness, competitiveness and connectivity.”

The Chancellor also launched yesterday the UK Secondary Capital Raising Review, which is intended to expand the pool of capital available for firms through secondary transactions in a bid to lift the City’s global competitiveness.

The surcharge was introduced in 2011 as a means to extract money from banks after the sector received billions of pounds of taxpayers’ money to save it from collapse during the financial crisis. 

The lobby group also called for an overhaul of the UK’s tax system to attract more businesses to Britain and a ramping up of investment in the country’s judiciary system.

“There must be continued investment across the country, the deployment of world-leading technology must continue, and our expertise in key future markets such as green finance enhanced,” Celic added.

“Achieving these goals will need closer working between government, industry, and regulators.”