Finance Bill 2012
The Chancellor has also announced changes to the rate of the bank levy which is charged on a bank’s chargeable equity and liabilities. The rate applied to short term liabilities will be increased from 0.088 percent to 0.105 percent from 1 January 2013, whilst the reduced rate for long term equity and liabilities will increase from 0.044 percent to 0.0525 percent. Although it is stated that the rate changes are in part aimed to ensure that banks do not benefit from the additional reduction in corporate tax rates, it is more likely that revenues from the first full year of the Bank Levy have fallen short of expectation. The change is expected to generate £450m of additional annual revenue but the expected total revenues generated by the Bank Levy remain at £2.5bn per annum. This is the fourth successive increase in the rate of the Bank Levy and such uncertainty will be a concern for banks operating in the UK.