UK doubles bank surcharge to 6% for 15 months

The UK will double the Bank Corporation Tax Surcharge from 3% to 6% for 15 months, starting January 1, 2027, as part of a Budget plan to help fund energy support. Chancellor John Healey announced the temporary increase, which is scheduled to end March 31, 2028, before the surcharge returns to 3% on April 1, 2028. The government estimates the change will raise about £1.5 billion over the period. The higher rate applies to chargeable profits above a £100 million group allowance. The government plans to legislate the change in the Finance Bill 2026-27. The Budget’s energy measures include a £2.6 billion Household Energy Payment programme. The government says eligible households in England in council tax bands A to D will receive £100 from January 2027, with up to 20 million households supported. The package also includes an extension of the VAT cut on electricity. The surcharge is added to the main corporation tax rate, bringing the temporary combined rate on affected bank profits to 31%. The rate had been reduced from 8% to 3% in 2023. The Budget’s projected additional revenue is £305 million in 2026-27, £950 million in 2027-28 and £220 million in 2028-29. Banks and industry...