HSBC and Standard Chartered had complained about the levy, and said it was disproportionately punitive as they were registered in the UK but had the majority of their assets overseas.
Jupiter Global Financials fund manager Guy de Blonay thought this was an attempt by the chancellor to incentivise both banks from moving overseas, even if that meant domestic banks took the hit.
“It will hit domestic banks harder, but we are not talking big numbers and that will come down as corporation tax falls from 20 per cent to 18 per cent by 2020,” he said.
George Osborne’s juggling act is not over yet
The move to alter the way banks are taxed may have prevented two major names – HSBC and Standard Chartered – from exiting the UK, but not everyone is happy with the changes.
The new 8 per cent surcharge will be levied purely on a bank’s UK profits.
This is great if you are based in the UK but do the bulk of your business overseas, but not so good if you are one of the UK’s so-called challenger banks.
The Financial Times reported last week that several challenger banks – including Aldermore, Shawbrook and OneSavings – were to meet the British Bankers’ Association (BBA) in a bid to lobby the trade body to fight the charge.
Reacting to the initial announcement in the Budget, BBA chief executive Anthony Browne said: “Yet another bank-specific tax will reinforce fears that Britain is becoming a less attractive place for banks to do business.”
He said this was the fifth new bank-specific tax measure in as many years and would increase the sector’s tax burden by “nearly £2bn”.
“We believe the government should conduct a strategic review of the way banks are taxed to ensure the UK remains a competitive place.”
