Tax and the City review for November 2021

Autumn Budget/Finance Bill measures relevant to financial institutions

Bank taxation

A review of bank taxation has been taking place to ensure banks do not pay too high a rate of tax when the CT rate increases to 25% in 2023. Banks currently pay a corporation tax rate of 27 per cent comprised of standard corporation tax at 19% and the 8% surcharge.

The rate of the bank corporation tax surcharge will reduce from 8% to 3% so that in 2023 banks will pay a corporation tax rate of 28% (25% plus 3%). This is still an increase of 1% on what banks currently pay – but it is described as competitive with other financial centres including New York and Paris (although the rate...