UK Finance has warned John Healey that the Lloyds Bank tax budget impact could widen if next week’s budget raises bank taxes again. The lobby group says higher bills could push business and jobs toward rival financial hubs, with London already at 46.2% in its comparison.
The report behind that warning is commissioned each year by UK Finance and prepared by PwC for a large bank model. It puts Amsterdam at 42.2%, Frankfurt at 39.1%, Dublin at 29% and New York at 27.9%, while saying London is the most tax-intensive city in the comparison.
Paris and the tax comparison
The dispute turns on Paris. UK Finance has consistently left it out, and campaigners say that makes the comparison incomplete. The same bank in Paris would face a total tax rate between 51.6% and 57.3%, according to calculations reviewed by a leading accountancy firm, which is up to 11.1 percentage points higher than London.
UK Finance said it had considered including Paris but could not produce a robust like-for-like figure using the report’s model bank. That leaves its comparison built around London, Amsterdam, Frankfurt, Dublin and New York, not the full set of major hubs that critics want included.
Paul Nowak and the warning
Paul Nowak said, “It’s little surprise that some in the finance lobby are cherrypicking jurisdictions to aid their argument.” He also said, “This is a misleading attempt to make the case against fair taxes … it tells us nothing about the actual taxes paid by Britain’s big banks, which are likely far lower than many competitors.”
Simon Youel added, “This raises the question of whether Paris was cynically omitted to allow the report’s sponsor, UK Finance, to claim that the City contributes more tax than any other global financial sector.”
Budget pressure on banks
The TUC says reversing Tory cuts and increasing the bank-specific surcharge from 3% to 8% could raise £2.25bn per year. For banks including Lloyds, JP Morgan and Revolut, the question now is whether the budget leaves the surcharge unchanged or pushes it higher, after UK Finance told Healey that business and jobs could shift if the burden rises.
That comparison is now the point of the argument: UK Finance wants London measured against rival hubs on its terms, while campaigners say Paris changes the picture enough to weaken the case for a higher tax. If Paris is counted on the same basis, London no longer looks like the outlier the lobby group describes.
