UK Bank Shares Fall Over Possible Higher Tax
UK bank shares fell Friday before the Budget. Reports say the government is considering a higher surcharge on bank profits.
The change could come in the chancellor's October 28 Budget. Senior bankers told the BBC they expect bank tax later this month.
UK Finance warns a tax rise could harm competitiveness, investment and jobs. Unions back higher taxes on banks.
Banks now pay a 3% surcharge on top of 25% corporation tax. They also pay a levy on their balance sheets. One option under discussion is restoring the surcharge to 8%.
Klear Note — A surcharge is an extra tax on bank profits, beyond corporation tax.
Key Terms 5
- surcharge An extra tax added on top of a regular tax.
- chancellor The UK's top finance minister, who plans the Budget.
- UK Finance A group that represents UK banks.
- corporation tax A tax paid by companies on their profits.
- competitiveness How well businesses can compete with rivals.