The bank levy consultation document issued by HMRC on 4th July contains discussion of some controversial issues. Responses to the consultation document are due by 26th September, and an HMRC open meeting on Monday 5th August gave more flavour of HMRC’s objectives and also confirmed that there would be working groups (though probably no more than a single meeting) on netting, protected deposits and probably other issues. The aim is to publish both the consultation response and draft legislation in November.
The bank levy remains, as at inception, a zero sum game, so changes which benefit some banks will have to be paid for either by another specific group or by an uplift in the rate of bank levy. Deep into the consultation document (at 10.1) is the acknowledgment that bank levy has raised less than the initial target £2.5 billion in both years of operation. HMRC also acknowledged at the open meeting that the target annual yield has now increased to £2.9 billion as a result of CT rate reductions. It seems likely that an objective of the consultation is to assess the pros and cons of changing the tax base rather than increasing the rate of levy again.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.