John Healey poised to raise taxes on banks in budget
News Source
β’Thu, 15 Oct 2026 16:17:05 GMT
π° What Happened
UK Chancellor John Healey is expected to raise taxes on banks in his budget on 28 October 2026. One option under discussion is reversing earlier cuts to the bank surcharge, which would raise more than Β£2 billion a year. Industry figures believe the surcharge could rise back to 8 percent from 3 percent. Healey was in Bangkok for meetings of the International Monetary Fund and World Bank.
π The Backstory
The extra money is needed because the war in the Middle East has pushed up government borrowing costs, eating into the financial cushion the Treasury had built up. UK banks have made large profits as interest rates rose, and the four biggest made Β£200 billion in pre-tax profits over five years.
Bank bosses have lobbied hard against higher taxes, and industry groups warned that jobs could move abroad. Healey has said he wants his first budget to give "breathing space" to consumers and businesses facing higher energy prices.
π― Why It Matters
Tax decisions like this affect how much banks lend, where they put their staff, and how much money is left for public services. The choice is really about who pays to fill the hole in the government's finances. Banks argue that higher taxes push jobs and investment abroad, while unions say the sector can easily afford more.
UK Chancellor John Healey is expected to raise taxes on banks in his budget on 28 October 2026. One option under discussion is reversing earlier cuts to the bank surcharge, which would raise more than Β£2 billion a year. Industry figures believe the surcharge could rise back to 8 percent from 3 percent. Healey was in Bangkok for meetings of the International Monetary Fund and World Bank.
The extra money is needed because the war in the Middle East has pushed up government borrowing costs, eating into the financial cushion the Treasury had built up. UK banks have made large profits as interest rates rose, and the four biggest made Β£200 billion in pre-tax profits over five years.
Bank bosses have lobbied hard against higher taxes, and industry groups warned that jobs could move abroad. Healey has said he wants his first budget to give "breathing space" to consumers and businesses facing higher energy prices.
Tax decisions like this affect how much banks lend, where they put their staff, and how much money is left for public services. The choice is really about who pays to fill the hole in the government's finances. Banks argue that higher taxes push jobs and investment abroad, while unions say the sector can easily afford more.