UK finance industry calls on government to axe additional bank taxes

Britain’s finance industry on Friday called on the new Labour government to phase out additional taxes on banks, warning that lenders in London face a higher total tax burden than in rival cities such as New York and Frankfurt.

Bank trade body UK Finance made the call as part of its submission to the government ahead of Labour’s first budget statement on Oct 30.

Banks in Britain, which have seen profits surge thanks to higher interest rates, have intensified lobbying against possible tax hikes, amid concerns finance minister Rachel Reeves may tap the sector to boost public finances, industry sources previously told Reuters.

The previous Conservative government trimmed a surcharge on bank corporation tax, but the lobby group wants it scrapped completely.

“We strongly welcome the commitment to publish a roadmap for business taxation and believe that it should include a specific roadmap for banks, with a plan to phase out the bank corporation tax surcharge and the bank levy over time,” UK Finance said.

The lobby group also reiterated a long-held recommendation to abolish a 0.5 per cent stamp duty charge imposed on UK share purchases to encourage more investment into Britain’s struggling stock markets.

The Investment Association, a group representing fund managers, said in a separate report on Friday that the government should remove the stamp duty. The Labour Party has said it is reviewing the pensions system to look at ways to encourage more investment in the UK.

Some analysts say stamp duty would have little impact on boosting demand for shares and that other factors including the decline of defined benefit pension schemes and the limited appeal of listed British companies have been bigger factors in weak demand for UK shares.

Among its other recommendations, UK Finance repeated a call for technology, social media and telecoms companies to be compelled to help reimburse victims of fraud.

Under new rules coming into effect this month banks and payments firms will be required to reimburse fraud victims by up to 85,000 pounds ($111,945.00), rather than on a voluntary basis and at varying rates as currently.