DATA & FIGURES
Profits at banks including NatWest, Lloyds, and Barclays have been boosted by higher interest rates, with £7.7bn, £6.7bn, and £9.1bn in pre-tax profits, respectively, in 2025, and the potential tax raid could raise £9bn over four years by reversing a decision to cut a surcharge on the banking industry, with banks already paying a total tax rate of about 46.4% when employment taxes and VAT are taken into account
THE SCENARIO
The potential tax raid is set against the backdrop of rising household costs and a growing need for support, with one in five people skipping meals, and the UK's banking sector facing an uncompetitive tax regime compared to rival financial sectors, with a total tax rate of about 46.4% compared to 38.9% in Frankfurt and 27.9% in New York
DIRECT QUOTE
"When one in five people are skipping meals, you can’t afford to be held hostage by people defending the status quo" — Paul Nowak, Leader of the Trades Union Congress (TUC)
BBN INSIGHT
The potential tax raid on UK banks has both positive and negative sides, with the positive side being that it could raise £9bn over four years to fund support for struggling households, and the negative side being that it could deter investment and lead to job losses, as City bosses argue that the UK already has an uncompetitive tax regime, and that a tax raid would be 'economic suicide', and the TUC argues that the UK needs a system that is better at taxing wealth and windfall profits, rather than relying on working people to pay more tax