Bank shares fall as Chancellor expected to raise bank taxes amid IMF trip criticism
Bank bosses expect a tax rise in the Budget as shares fall, while the Chancellor and Foreign Secretary face criticism over a Bangkok IMF trip.
The Full Story
A plain summary built from the channels that reported this story.
Bank tax speculation grows as Chancellor meets industry bosses
The Chancellor met with the bosses of some of Britain's biggest banks and building societies this morning, ahead of the October Budget, as speculation grows that the sector will face a tax rise. Bank shares have fallen amid the uncertainty. Banking executives expect to be targeted. One described banks as being on the menu.
The banks are an attractive target because their profits have risen sharply in recent years. The big four banks, Lloyds, NatWest, Barclays and HSBC, made around £15bn in profits on their UK operations in the first six months of this year alone. Banks already pay more tax than most other companies. Every UK company pays 25% corporation tax. Banks also pay a surcharge on profits. In 2016, the surcharge was 8% on top of the then 19% corporation tax rate, a total of 27%. In 2023, Rishi Sunak raised the main corporation tax rate to 25% and cut the surcharge to 3%, a total of 28%, arguing this kept the system competitive with European rivals. Last year, the 3% surcharge raised £1.2bn. Reversing the cut back to 8% would raise an extra £2bn, though competitiveness arguments may mean a smaller increase.
The banking trade body warned that further tax increases would weaken competitiveness, discourage investment and job creation, and work against the government's ambition to deliver growth in every postcode. The Treasury said it does not comment on pre-Budget speculation and has not denied that a rise is coming. The Budget is due on 28 October.
Separately, the Chancellor and the Foreign Secretary have faced criticism over a trip to Bangkok for the annual meeting of the International Monetary Fund and the World Bank Group. A social media video showed the two men being driven around in a tuk-tuk. Critics called the video insensitive and out of touch, pointing to domestic pressures including the cost of living, youth unemployment and the highest tax burden since the Second World War. The IMF also said Britain was increasing tax at the highest rate of any country in the Western world. Supporters of the trip said international cooperation is needed to solve domestic problems. Newspaper front pages carried the bank tax story, with one reporting the Chancellor was poised to raise taxes on banks in the Budget and another describing a tax raid on banks.
On screen
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Key Claims
Claims reported during this story's coverage, grouped by how many channels reported each one. Select a dot to see the source excerpt.
| Claim |  |  |  |
|---|---|---|---|
| Reported by all 3 channels | |||
| There was growing speculation about a possible tax increase on the banking sector. | |||
| Only on one channel | |||
| All UK companies pay corporation tax at 25%, according to the report. | Not reported by BBC One | Not reported by GB News | Reported by Sky News |
| Critics described a tuk-tuk video as insensitive, inhumane and ridiculous. | Not reported by BBC One | Reported by GB News | Not reported by Sky News |
| Ed Miliband went on another foreign trip while meetings are typically attended only by the Chancellor. | Not reported by BBC One | Not reported by Sky News | |
| Reversing the bank surcharge from 3% to 8% would raise an extra £2 billion. | Not reported by GB News | Not reported by Sky News | |
| The big four banks made £15 billion in profits in the first six months of the year. | Not reported by GB News | Not reported by Sky News | |
| The Chancellor and the Foreign Secretary attended the IMF and World Bank annual meeting in Bangkok. | Not reported by BBC One | Reported by GB News | Not reported by Sky News |
| The Chancellor met bosses of major UK banks and building societies ahead of the October Budget. | Not reported by BBC One | Not reported by GB News | |
| The IMF reported that the UK is increasing taxes at the highest rate among Western countries. | Not reported by BBC One | Not reported by Sky News | |
| UK banks have had strong profits in recent years and their tax payments have risen because taxes are charged as a percentage of profit. | Not reported by BBC One | Not reported by GB News | |
Channel Perspectives
What each channel focused on, with key quotes.
Sky News led with the Chancellor's meeting with bank bosses and focused on explaining the tax regime. It framed banks as profitable and therefore a likely target, with a neutral, explanatory tone. It did not cover the IMF trip criticism.
- “The Chancellor, John Healey, has met with the bosses of some of Britain's biggest banks and building societies this morning.”
- “Banks have had a really good four or five years.”
- “every single company in the UK pays 25% corporation tax.”
GB News was heavily critical of both the reported bank tax rise and the IMF trip. It framed the Chancellor as driving away mobile financial firms while ministers were seen 'prancing around Bangkok', and it contrasted the trip with domestic cost of living and unemployment pressures. The segment was opinionated and mocking rather than explanatory.
- “They're hypermobile. Dubai is calling. Frankfurt is calling.”
- “That video looks insensitive, inhumane, and ridiculous.”
- “They're prancing around Bangkok.”
BBC ONE West focused on the business detail behind the tax speculation. Its business editor set out bank profits, the surcharge history and the Treasury's refusal to deny a rise. It did not cover the IMF trip criticism, keeping to market and Budget facts.
- “banking executives spoken to by the BBC are resigned to being, as one of them put it, on the menu”
- “The big four banks made £15 billion in profits in the first six months of this year alone.”
- “The Treasury is not commenting on speculation but they haven't denied it.”
Broadcast Timeline
News broadcasts tracked for this story, in time order.