UK govt increases bank levy

30 November 2011

The UK government has once again increased its levy on the country's banks as it attempts to fulfil its target of raising £2.5 billion ($3.8 billion) from the tax this year.

During his Autumn Statement delivered yesterday (29 November), chancellor George Osborne - who is also MP for Tatton - indicated the income generated by financiers has been lower than expected since the rule's implementation at the start of 2011.

As such, the amount levied on lenders' liabilities will be increased to 0.088 per cent on 1 January 2012 from its current level of 0.078 per cent.

It is thought that banks such as HSBC - which managed to maintain a strong balance sheet despite the pressures of the global economic downturn - will feel aggrieved at this development on the basis they are being treated unfairly.

Tom Aston of KPMG explained this move could also put international financiers off doing business in the UK.

By Asim Shah

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