Bank levy legislation
HMRC have published new draft legislation and explanatory notes following the Government’s announcement of a new bank levy from 1 January 2011. The new legislation relates to the collection and management of the bank levy. An updated technical note has also been published.
The Government is expected to announce its final decision on the bank levy rates shortly. From 2012-13 the levy is expected to generate around £2½ billion of annual revenues.
The bank levy is intended to encourage banks to take on less risky funding profiles, improve regulatory standards and enhance the financial stability of the UK banking industry. The bank levy will apply to:
- The global consolidated balance sheet of UK banking groups and building societies.
- The aggregated UK-group and UK subsidiary balance sheets, together with a proportion (determined in accordance with these provisions) of the balance sheets of foreign banks operating in the UK through permanent establishments which are members of foreign banking groups.
- The balance sheets of UK banks and banking sub-groups in non-banking groups.
- The balance sheets of UK banks that are not members of groups.