Sunak to cut tax surcharge on bank profits to keep City competitive

Rishi Sunak plans to cut taxes on bank profits by more than 60% in next week’s budget to keep London competitive on a global scale in the wake of Brexit.

According to budget briefers, the prime minister plans to reduce the surcharge from 8% to 3% from April 2023 as he seeks to continue banking in the UK during times of high corporate tax rates.

In the March budget, Snack announced plans to raise the general corporate tax rate from 19% to 25% from 2023. However, he admitted that if the current highest tax rates continue, “taxing banks will be uncompetitive and damage one of the UK.” Major exports “.

Banks are currently paying taxes on profits at a tax rate of 27%. It consists of a 19% corporate tax and an 8% surcharge. Prices are about the same as other financial centers such as New York and Paris.

The prime minister would say that the overall UK corporate tax rate on banks after 2023 is uncompetitive, with banks facing a total tax rate of 33%, unless the surcharges are reduced. Instead, from 2023, their total tax rate will rise to only 28% — 25% corporate tax and 3% surcharge.

Sunak claims that the UK is the only large financial center that imposes certain surcharges on bank profits.London city Claim The financial services sector, including staff and customers, bears £ 75.6 billion annually in taxes.

A Treasury spokesman said, “I will not comment on fiscal policy other than the budget.”

last month City Minister John Glenn has signaled a reduction in additional charges When he told the Financial Times, “To be competitive, you need a competitive tax rate. That’s in the prime minister’s head.”

This followed a promise from a snack in March to consider an additional 8% of the sector, first introduced by former Finance Minister George Osborne in 2015.

This move is welcomed by the financial sector. Lobbying is intense For additional charges on profits of over £ 25m since its introduction. Last year, Topup raised £ 1.5 billion.

A colleague of the prime minister said he was considering a budget for October 27 to ensure that banks continue to pay a fair share while remaining competitive and protecting their jobs.

However, snacks could face criticism from opposition politicians for reducing bank tax surcharges during times of tight finances. this month, Universal Credit Temporary £ 20 Weekly Rise It was abandoned.

Thousands of jobs and over £ 1 trillion in assets have been transferred to rivals such as Frankfurt, Paris and New York as the UK lost access to the unlimited EU market earlier this year.

Amsterdam has already overtaken the city as the top venue for trading euro-denominated equities and derivative contracts. Spat has occurred Whether EU banks should remain dependent on the UK’s vast clearing house in the long run.

Sunak to cut tax surcharge on bank profits to keep City competitive Source link Sunak to cut tax surcharge on bank profits to keep City competitive

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