John Healey bank tax raid doubles the bank surcharge to 6% from January, with the higher levy set to last 15 months. The chancellor said the extra tax would help pay for immediate support on energy bills, putting fresh pressure on lenders that already need a stable regime for planning and lending.
William Chalmers said Lloyds Banking Group hopes the tax rate is limited and temporary. He added that the bank had paid around £1.8bn of corporate taxes year to date, and said it mattered that the UK banking sector could provide services to businesses, households and communities in a cost-effective way while staying internationally competitive.
Lloyds posts £2.3bn
£2.3bn in third-quarter pre-tax profits gave Lloyds a stronger platform to argue its case, after profits almost doubled from £1.2bn a year earlier. The improvement largely reflected an £800m hit taken last year after the bank set aside the same amount for compensation linked to the motor finance scandal.
10% net interest income growth also showed why lenders have benefited from higher rates, even as the new levy raises the tax take on the sector. If that funding backdrop weakens, the surcharge comes on top of a business model that is still carrying the weight of prior compensation charges and a larger corporate tax bill.
6% from January
6% is the new surcharge rate Healey announced on Wednesday, replacing the lower level that applied before Thursday. The move is designed as a 15-month measure, not a permanent rewrite of bank taxation, and the Treasury has said it will legislate for that limit in the financial bill.
By March 2028, Lloyds hopes the higher levy will not have been extended beyond the current plan. That expectation reflects the risk already raised by bankers and industry lobbyists: once a tax is tied to energy costs, the pressure to keep it in place can return if bills rise again.
William Chalmers presses the point
“We hope this tax rate is limited,” Chalmers said, before pressing the government on the link between energy prices and bank taxes. “When we look forward, what impact, if any, will energy prices have on that? Well, I don't see an obvious linkage between energy prices and bank taxes.”
“In fact, if anything, it makes it even more important that we’re able to lend into the real economy and secure growth, which is the best defence against energy price impacts that might otherwise be there on the UK economy,” he said. His argument is straightforward: if the tax is meant to be temporary, the Treasury now has to preserve that limit in law, or risk turning a short-term energy measure into a longer-running cost for lenders and, eventually, borrowers.
