Bank shares boost after surcharge cut

Shares of Britain’s major banks have received a boost after the autumn budget confirmed it will slash its tax surcharge on the sector to 3 per cent from 8 per cent.

Lloyds Banking Group and Natwest saw shares rise by about 1.5 per cent, lifting them towards the top of the FTSE 100, after the Treasury confirmed the tax on banks’ profits would be cut from April.

The move aligns with the Government’s decision to hike up corporation tax from 19 per cent to 25 per cent from April, which banks pay on top of the surcharge. It means banks will still be paying a higher rate of tax than they were previously,

but by just 1 per cent rather than the 6 per cent that they could have faced.

The threshold for the surcharge will also be raised from £25 million to £100 million. The Government confirmed that banks will “continue to pay a higher combined rate of corporation tax than most other companies”.

↑ The Chancellor of the Exchequer Jeremy Hunt briefs the

↑ The banks tax surcharge has been lowered to 3%