The bank levy will be increased from the start of next year as the current rate has failed to raise sufficient revenue, according to the chancellor’s autumn statement.
Unveiling the move today, George Osborne confirmed that the bank levy will be increased from its present 0.078% to 0.088% from January 1 to ensure it attains the goal of raising £2.5 billion a year in tax revenue.
HM’s Treasury’s full statement reveals that the increase is “to offset the forecast shortfall in receipts for 2011 and future years”.
The move follows the scrapping of a lower phase-in rate in February and an increase from the then 0.075% in March.
The chancellor also asserted that the UK will not agree to the introduction of Europe-wide financial transaction tax, as he regards this as a tax on pensions, not one directly on banks.
Osborne also used his speech to say the UK became too reliant on financial services in the period before the recession.
“In the years leading up to the crash, our economy became dangerously over-dependent on the success of a poorly-regulated City of London,” he said, claiming finance accounted for £1 of tax revenue for every £8 by 2007.
“That left Britain completely exposed when the banks failed.”
While stating that financial services remain an important industry for the country, Osborne unveiled a package of measures – including infrastructure investment, pledges on energy supply and the creation of superfast digital networks – to bolster growth in other sectors.
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