Budget 2012: Banking levy will rise to 0.105%

The banking levy will be increased to 0.105% next year, chancellor George Osborne announced in his Budget speech to today.

Osborne says the increase, from its current 0.088%, is being carried out “to ensure that corporation tax cuts do not benefit the banks”. The corporation tax will be lowered to 22% by April 2014.

The increased levy, which comes into effect from January next year, will raise about £2.5 billion a year for government coffers.

The levy is intended to discourage banks from depending on risky forms of borrowing, as well as raise money for public finances.