Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
Free Webinar - Unlock Divergence Trading: Learn from Seth Julian MBA | TThursday, March 23, 2023 | 10:00AM PST Enroll Now
UK banks urge government to ease tax burden as Brexit beckons
© Reuters. Canary Wharf and the City of London financial district are seen from an aerial view in London
By Huw Jones
LONDON (Reuters) - Banking in Britain paid 40 billion pounds ($52 billion) in taxes in the last financial year with half from foreign lenders, underscoring the need for a government rethink on taxes to keep London competitive after Brexit, UK Finance said on Wednesday.
Banks and their employees paid a total of 39.7 billion pounds in taxes, or 5.5% of government receipts, unchanged from the prior year, UK Finance said in a review compiled by consultants PwC (see graphic).
The tax raised was roughly split between those paid by employees, and the corporate tax, surcharge on profits and balance sheet levies paid by the lenders themselves.
The surcharge and levies were introduced after Britain had to bail out lenders with public money during the financial crisis a decade ago.
Britain's "fiscal competitiveness" has declined relative to other global financial centres like New York, where banks have benefited from recent cuts in corporate taxes, the review said.
Many banks operating in Britain have opened European Union hubs in cities like Frankfurt to ensure continuity of service for EU customers after Britain leaves the bloc.
Banks are moving about a trillion euros in assets from London to their new subsidiaries, which is likely to lead to a loss of some UK tax revenue.
The review estimated that the total tax rate for banks in London is 47.1%, compared with 44.7% in Frankfurt and 33.5% in New York.
"In this context, maintaining fiscal competitiveness is more important than ever," the review said.
"This is also vital to ensure a healthy domestic banking market which can continue to provide credit to support future growth of the UK economy."
UK Finance Tax Graphic: https://fingfx.thomsonreuters.com/gfx/mkt/12/7933/7864/UKFinancetax.png
The review also showed a fall in headcount at UK-headquartered banks due to restructuring, and customers using online and mobile banking.
While foreign-heaquartered banks hired more staff, this was due to getting ready for Brexit, implementing IT changes and mergers, and is unlikely to be indicative of the long-term trend, the review said.
The sector overall employed 342,413 people, it added.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.