Banks face £2.5bn new tax (From Bradford Telegraph and Argus)

Banks face £2.5bn new tax

3:44pm Wednesday 20th October 2010 in News

Britain's new £2.5 billion a year permanent bank tax will take a step forward when draft legislation is published tomorrow, the Chancellor said today.

George Osborne said he wants the levy, first announced in the June emergency Budget, to raise the "maximum sustainable revenues" without driving banking groups out of the UK.

More details will emerge tomorrow when the legislation is presented ahead of its planned introduction on January 1.

The move aims to raise around £2.5 billion a year by forcing banks to pay penalties based on their net worth, seen as more a tax on risk rather than profits.

Mr Osborne said banks should share the pain of measures to repair the deficit caused by the financial crisis.

But he said the Government "neither want to let banks off their fair contribution, neither do we want to drive them abroad".

Mr Osborne also confirmed all UK banks will be asked to sign up to a tax code of conduct by the end of next month.

Only four out of 15 banks have signed up to the code under which they agree not to design avoidance schemes to reduce their bills or those of their clients.