Chancellor summons UK bank chiefs amid industry calls not to hike taxes

Chancellor John Healey has convened a meeting with the heads of the UK's largest banks, coinciding with his autumn Budget statement. The gathering, set to occur in person next Tuesday, comes amidst calls from the industry to refrain from imposing additional taxes on banks. The Treasury has declined to comment on the reports, emphasizing that they do not respond to speculation or Budget-related proposals.

The Trade Union Congress (TUC) and Positive Money have advocated for increased taxes on bank profits, arguing that the revenue could aid in supporting cost-of-living assistance for households. Industry leaders have expressed concerns that such a move could undermine confidence and investment in the City. UK Finance's chief executive, David Postings, highlighted that an escalating tax burden on the financial sector poses a risk to maintaining the UK as a global financial center.

JP Morgan's Jamie Dimon echoed these concerns, warning against raising the surcharge on banks' profits, as it could drive investment to other countries. Tax payments from the banking industry surged by 8.5% to £39.1 billion in the 2024-25 tax year, up from the previous year, driven by a 20% increase in profits across the sector.

The surcharge, currently set at 3%, has seen a 20% jump year-over-year. The TUC is pushing for an increase to at least 8%, which they estimate would generate £9 billion for the Treasury over four years. City of London Corporation policy chairman Chris Hayward advised Chancellor Healey to "do no harm," urging him to avoid bank windfall taxes, other sector-specific tax hikes, and maintain the VAT exemption for financial services.

Chancellor Healey is reportedly concentrating on the government's objectives, which include providing "breathing space" for families and businesses and promoting growth across all regions while adhering to fiscal regulations.