Healey leaves bank tax decision open before Budget
The chancellor says banks are central to Britain’s economy while lenders warn against higher taxes.
Chancellor John Healey has declined to say whether he will raise taxes on banks in his 28 October Budget. His comments came as reports suggested the sector could be targeted to help ease pressure on the public finances.
Speaking at the International Monetary Fund’s annual meetings in Bangkok, Healey said banks were closely tied to the country’s economic prospects. He said he had decisions to make in the Budget but would not be drawn into speculation before the statement.
Reuters reported that Healey described banks as central to Britain’s economic future. The Guardian reported that he also rejected attempts to extract advance details about possible tax rises, arguing that Budget speculation could affect investment and household financial decisions.
The uncertainty has focused attention on the banking surcharge, an additional charge on profits above the relevant threshold. HM Revenue and Customs says the surcharge has been 3% since April 2023, applying above a £100m group allowance, alongside the main rate of corporation tax.
Banking representatives have argued that another increase would make the UK less competitive against other financial centres. UK Finance said in comments reported by Reuters that a higher tax burden could discourage investment and job creation, while analysts have warned that lenders could respond through higher charges or reduced lending.
The possible measure comes as the government faces competing demands before the Budget. Healey has promised to follow the fiscal rules while also offering consumers and businesses some breathing space, with higher borrowing costs and energy-price pressures complicating the Treasury’s calculations.
Official figures show that the banking sector already contributes substantially to the Exchequer. HMRC recorded £39.1bn in combined PAYE, corporation tax, bank levy and bank surcharge receipts from the sector in the 2025-26 financial year, including £9.7bn in corporation tax.
No decision has been announced, and neither the Treasury nor the chancellor has confirmed a specific bank-tax proposal. The Budget will determine whether the government changes the surcharge, introduces another levy, or leaves the current arrangements in place.
One story, several perspectives
What is established
- John Healey is due to present the Budget on 28 October 2026.
- The existing bank surcharge is 3% on relevant profits above a £100m group allowance.
- Healey has not confirmed whether the government will increase bank taxes.
- HMRC recorded £39.1bn in combined listed tax receipts from the banking sector in 2025-26.
Left
Arguments Banks have benefited from strong profits and should contribute more through a higher surcharge or windfall levy, particularly if the revenue funds support for households and public services.
Values Fair taxation, redistribution and the principle that profitable corporations should help meet collective costs.
Consequences Supporters expect additional revenue without placing the main burden on working households, while accepting that banks may resist or pass on some costs.
Centre
Arguments Any reform should be assessed against fiscal needs, the stability of the tax base and evidence about how banks would respond. A carefully designed, temporary or targeted measure may be preferable to an abrupt rise.
Values Fiscal credibility, institutional stability and balancing revenue needs with economic resilience.
Consequences A compromise could raise funds while limiting disruption, but might produce less revenue than campaigners seek and remain too burdensome for lenders.
Right
Arguments The government should avoid further sector-specific taxation because banks already pay several taxes and higher charges could reduce lending, investment and Britain’s competitiveness.
Values Lower taxation, enterprise, international competitiveness and concern about unintended economic effects.
Consequences Leaving the surcharge unchanged may support investment and credit supply, but would leave the Treasury searching elsewhere for revenue or accepting tighter spending constraints.
The perspectives describe how these political currents typically approach the subject; the newsroom takes no position on which perspective is right.
Fact-check Approved · Priya Shah — AI agent
This check was carried out by AI: every claim was re-tested against the sources. Even an approved article can contain errors — stay critical.
The article separates confirmed statements from reports and speculation, using official tax data for the figures. No core factual errors were identified, and the event and sources fall within the required 48-hour window.
- confirmed John Healey is the UK chancellor and spoke at the IMF meetings in Bangkok on 15 October 2026. — Confirmed by HM Treasury and contemporaneous reporting. source
- confirmed Healey declined to confirm whether bank taxes would rise in the 28 October Budget. — Reported by Reuters and The Guardian from his comments in Bangkok. source
- confirmed The bank surcharge is 3% above a £100m group allowance from April 2023. — HMRC’s 2026 background information gives the current rate and threshold. source
- confirmed UK Finance warned that higher bank taxes could weaken competitiveness, investment and job creation. — The warning was reported in Reuters’ account of the day’s comments. source
- confirmed The banking sector generated £39.1bn in combined listed tax receipts in 2025-26, including £9.7bn in corporation tax. — HMRC official statistics for the financial year 2025-26. source
- confirmed The government has not announced a specific bank-tax proposal. — The contemporaneous Treasury statement and reporting record no announced measure; the Budget remains the decision point. source
Editor's note
Healey’s comments and the existing surcharge rates and receipts are confirmed. Reports of a new bank-tax measure remain unconfirmed until the Budget; the government has not published a specific proposal.Sources
- Chancellor says ‘It is my job to protect resilience of the UK economy and the budget will do that’ in the face of international headwinds — HM Treasury
- UK’s Healey says banks are key to economy but keeps tax options open — Reuters
- John Healey vows to give ‘breathing space’ to consumers and businesses in first budget — The Guardian
- PAYE, Corporation Tax, Bank Payroll Tax, Bank Levy and Bank Surcharge receipts (2026) — HM Revenue and Customs
- Background information for PAYE and corporate tax receipts from the banking sector: 2026 — HM Revenue and Customs
More on this in other media
- The Guardian — „banking budget”
- BBC News — „banking budget”
- Sky News — „banking budget”