Andy Burnham and John Healey plot huge tax hike
John Healey is said to be considering an increase in taxing bank profits at the Budget in an effort to get a grip on the Government’s spending challenges. The Chancellor may hike the surcharge on lenders' profits above £100million from 3% to 8%, reversing a cut introduced in April 2023 when Jeremy Hunt was Chancellor. Major banks already pay a surcharge on their profits over and above the Corporation Tax they already pay. While upping the surcharge could raise some £2billion for the exchequer, banks warn it could inflict a £20 billion hit to the economy.
TL;DR
- John Healey is considering raising the bank profit surcharge from 3% to 8%.
- This potential tax hike could raise approximately £2 billion for the government.
- Banks warn the measure could result in a £20 billion hit to the UK economy.
- Critics argue higher taxes could stifle investment, reduce lending, and increase costs for consumers and businesses.
- Supporters, like the TUC, believe banks are making excessive profits and should pay their fair share.
- The Treasury has declined to comment on speculation regarding tax decisions.
- Concerns exist that increased taxes could lead to higher mortgage rates and worse cost-of-living pressures.