Commenting on today’s announcement that the bank levy will increase from 0.105 % of banks’ balance sheets to 0.130%, Tom Aston, financial services tax partner at KPMG commented:
“This is the fifth successive increase in the bank levy over three years – probably some kind of tax record.
“News of the increase will be wearyingly familiar for banks, and is an alarming symptom of how rapidly banks’ balance sheets are shrinking. There is an element of the government chasing its own tail at each Budget and Autumn Statement in order to ensure that the bank levy yield still meets the magic £2.5 billion figure.
“Banks will now question whether Government policy objectives are joined up. At one end of the Treasury and within BIS the focus is on increasing lending to business whilst at the other end of the same building disincentives are being created for Banks that actually do lend.”
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