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Chancellor Rachel Reeves is set to spare Britain’s banks from a punitive Budget tax raid, after making it clear to colleagues she wants the sector to remain competitive and able to support the country’s growth, according to the Financial Times. Late Wednesday, the FT said while Reeves’ allies stress final tax decisions have not been taken, the chancellor and others involved in Budget preparations say banks in Britain already pay high levels of tax by international standards. ‘There’s obviously a list of possible tax measures, but raising taxes on banks is a long way down that list,’ a source told the FT. Another person close to the process said: ‘She is not minded to do this.’ A third person said: ‘Banks are already paying a lot of tax. We aren‘t going to do it,’ the FT reported. Banks, such as Lloyds Banking Group PLC and Barclays PLC, pay a 28% corporation tax rate, higher than the standard 25%, as well as a separate balance sheet levy that is charged at up to 0.1% of a portion of a lender’s balance sheet. The surcharge and levy collectively are forecast to raise about £2.5 billion in the coming year. The City had feared Reeves would use her budget to increase bank taxes to capture high profits in the sector, while simultaneously sending a political signal to Labour MPs that she was targeting financial institutions alongside ordinary voters. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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