Banks say Healey is planning Budget tax raid on their profits

Senior banking executives anticipate the UK government's forthcoming Budget will target their profits, according to the BBC. Chancellor Healey has described banks as part of the UK's economic "crown jewels" while refusing to rule out a tax raid on the sector. The four largest banks collectively generated approximately £15 billion in profit during the first half of this year, prompting calls for additional taxes from trade unions and others.

The banking sector trade body, UK Finance, warned against further tax increases, arguing they would weaken competitiveness, discourage investment, and job creation, and undermine the government's growth ambition. Currently, the sector pays a 3% surcharge on top of the 25% corporation tax rate, plus a levy on assets held on their balance sheets, contributing nearly £40 billion to the Treasury last year.

The chancellor could extract more money from the sector through various means, including reverting the surcharge to its previous 8% level, which could generate around £2 billion annually. Another option is a moratorium on banks using losses from the past to offset against profits, which could yield an estimated £1 billion per year for the Treasury. However, foreign banks such as JP Morgan, whose CEO Jamie Dimon has warned against further sector-specific taxes, could be exempt from such a policy.