Helen Lethaby summaries recent key developments including moves to enhance the bank levy
Key developments in recent weeks are as follows.
The bank levy introduced in FA 2011 to incentivise banks to adopt less risky funding models as well as to exact an annual £2.5bn contribution in the wake of the financial crisis is based on a bank’s ‘chargeable equity and liabilities’. This covers most sources of funding with the exception of tier 1 capital and deposits covered by depositor protection schemes. ‘High quality liquid assets’ (HQLAs) – assets capable of counting towards a bank’s liquidity buffer for regulatory purposes – are also deducted in calculating the tax base the rationale being that the margin on HQLAs is small and imposing a levy on the amounts...
