Key facts
- Banks will pay a 6% surcharge on profits above £100 million for 15 months.
- The City of London Corporation called for the tax to end as scheduled.
- A new Starter ISA was announced to encourage first-time investors.
UK banks are prepared to continue their opposition to a new bank tax, arguing that the temporary increase announced in Chancellor John Healey's maiden budget should be short-lived. Healey confirmed a 6% surcharge on profits above £100 million, set to last 15 months and fund energy support measures. Despite the announcement, shares in major banks like Lloyds, Barclays, and NatWest saw gains, likely due to the tax being less severe and shorter in duration than some had anticipated. The City of London Corporation, represented by policy chairman Chris Hayward, stated that the tax rise "must end as scheduled" and called for a clearer, long-term tax roadmap to provide certainty for businesses and investors. The budget also included measures such as a 10% capital gains tax rate for founders of successful firms and a new Starter ISA aimed at encouraging first-time investors. Financial adviser Emma Parler noted the potential of the Starter ISA but cautioned against encouraging risky investments.