UK banking sector contributes £31.3bn in taxes
New research from the British Bankers’ Association (BBA) shows that the tax contribution of the UK banking sector climbed to £31.3 billion in 2014.
The study, based on independent PwC analysis, found that foreign headquartered banks paid just over half of the total at £16 billion (51.1%) while UK-headquartered banks contributed £15.3 billion (48.9%). Employment taxes made up £17.6 billion of the overall total (£4.4 billion paid by banks; £13.2 billion paid by employees).
The data also show that the six main UK banks saw their tax contribution jump 55% in the first four years of the last Parliament. The Bank Levy has jumped 85% since it was first introduced in January 2011. It has subsequently been increased nine times and now comprises 17.8% (£2.2 billion) of total taxes paid by the sector.
Meanwhile, Corporation Tax accounted for £1.6 billion in 2013/14, rising to £2.3 billion (up 44%) in 2014/15. This remains below historical levels but is expected to climb further in coming years. It will also be supplemented by the additional 8% Bank Corporation Tax Surcharge, which the Chancellor announced in June 2015.