A banking industry report commissioned by trade body UK Finance and shared with John Healey has come under fire from campaigners who say its comparisons exaggerate how heavily London is taxed. The paper, produced as ministers prepare to consider a proposed rise in bank taxation at next week’s budget, purports to sum the total tax burden on a typical large bank in London.
UK Finance, which represents institutions including Lloyds, JP Morgan and Revolut, produces an annual tally that aggregates corporation tax, social security contributions, value‑added tax and bank‑specific levies to arrive at an overall effective tax rate. The report is intended to inform debate over the competitiveness of the UK financial centre relative to other global hubs.
Critics say the analysis is selective and misleading. Campaign groups and other observers have accused UK Finance of omitting major rival jurisdictions — notably Paris — from its comparisons, a step they argue skews the results and overstates London’s disadvantage if a bank tax is increased. They say a full comparison of comparable financial centres is necessary to assess the impact of any policy change.
UK Finance has framed the figures as evidence that an increase in bank taxes would undermine London’s position in the global market. Its report was circulated to policymakers as the budget debate approaches, signalling the industry’s intent to influence government thinking. The dispute highlights the wider tensions between the Treasury’s revenue-raising ambitions and the banking sector’s concerns about international competitiveness.
With the budget imminent, the claims and counterclaims are likely to feature in parliamentary and media discussions. Observers say independent analysis that includes a broader set of international financial centres would help clarify how proposed tax changes might affect the UK’s standing, but so far the published industry figures remain a focal point for both industry lobbying and campaigner criticism.