- Taxing profits of Barclays, NatWest, Lloyds and HSBC could raise £11billion
Shares in Britain’s biggest lenders fell sharply on Friday morning as investors fretted over reports Chancellor Rachel Reeves is planning a tax raid on the sector.
Bank bosses, including NatWest’s Paul Thwaite and Lloyds’ Charlie Nunn, have publicly urged the Chancellor against tax hikes on the sector.
But a report in the Financial Times on Friday claimed executives are increasingly anxious their warnings will be ignored.
A windfall tax on lender’s profits similar to that shouldered by the oil and gas industry, or an entirely new levy on the sector, could be used by Reeves to fill a so-called fiscal blackhole estimated to be at least £20billion.
It comes as workers, homeowners and businesses across the country fear they could be about to face a higher tax burden after the upcoming Autumn Budget.
One senior banker told the FT: ‘Politically it is an easy target. No one likes banks, they are seen as a whipping boy for the government.’
Falls: Britain’s biggest banks led losses on the FTSE 100 on Friday
Figures published by think tank Positive Money last month suggest taxing the profits of Barclays, NatWest, Lloyds and HSBC could raise more than £11billion for the Treasury.
NatWest shares led declines on the FTSE 100 on Friday morning, sinking 4.8 per cent to the lowest level in more than a month.
Lloyds Banking Group and Barclays were down 3.8 and 3.2 per cent respectively, while Standard Chartered was down 1.2 per cent and HSBC fell 1.1 per cent.
Close Brothers, Metro Bank and Paragon Banking Group were among the biggest fallers on the FTSE 250, sinking by 1.4 to 2.5 per cent each.
Deputy Prime Minister Angela Rayner is understood to have urged Reeves to consider a hike in the higher rate of corporation tax on banks from 28 to 30 per cent. The sector is already subject to a separate balance sheet levy.
An increase in the bank corporation tax surcharge on profits could raise up to £3billion, according to the FT.
Lloyds boss Nunn was among the banking leaders publicly urging against tax hikes in the group’s recently reported second quarter results, which saw the lender’s pre-tax profits come in at £2billion.
He said tax hikes ‘wouldn’t be consistent’ with the government’s growth agenda.
Thwaite of NatWest, which recently reported a 18 per cent surge in first half profit to £3.6billion, warned ‘strong economies need strong banks’.
Meanwhile, Barclays chief CS Venkatakrishnan said the sector is already ‘among the biggest tax payers in this country’ as his bank posted a £5.2billion profit for the first half.
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .