The Chancellor, John Healey, is weighing restoring the bank surcharge from 3% to 8%, according to reports from Bloomberg and the Guardian. This is the first specific rate to emerge in the bank tax speculation ahead of Wednesday's Budget.
The surcharge is currently 3% on top of 25% corporation tax, Bloomberg reports, as relayed by briefs.co. The move would reverse Jeremy Hunt's cut from 8% to 3% in April 2023.
The Guardian reported on Thursday night that the change would raise about £2bn a year, according to Britain Daily. The surcharge applies to bank profits above £100m. An 8% surcharge would take the combined headline rate on those profits to 33%, which matches 25% plus 8%.
UK Finance has written to Healey warning that restoring 8% would cost the economy £20bn, the Telegraph and Sky News report. That is the industry's own figure and has not been independently checked.
Goldman Sachs estimated on 15 October that an 8% surcharge would reduce net profit by 2% to 3% at Barclays and by 6% to 7% at Lloyds and NatWest. The FTSE 350 Banks Price Return Index fell by a little over 8% in the month to 20 October.
The Treasury has not confirmed the measure.