Spring Budget 2017 figures predict banks will cough up an extra £2.1bn in bank levy and surcharge payments compared with Autumn Statement 2016 forecasts
The government expects to pocket an extra £2.1bn from banks' coffers compared with what it forecast four months ago.
Figures tucked away at the back of the spring Budget statement reveal the Treasury now expects to bring in £27bn from the bank levy and surcharge combined between financial years 2015-16 and 2021-22.
The same analysis in last year's Autumn Statement reveals the government forecast it would only rake in £24.9bn from the two taxes across that time period.
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"It's no surprise that there's been an increase in the forecast for bank specific taxes," said a spokesperson for the British Bankers' Association. "While banks expect to pay their fair share of tax, the industry has now been subject to five bank-specific tax measures since 2010.
"We believe it's time the government draw a line in the sand; hold a strategic review of bank taxation and confirm that the surcharge will be scaled back as corporation tax receipts normalise."
The majority of the boost is thanks to the bank surcharge, which has applied to banks' accounting periods starting on or after 1 January 2016. For the forecasts for 2016-17 alone, the predicted receipts from the surcharge have leapt from £1bn in the Autumn Statement to £1.5bn in the spring Budget.
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The eight per cent additional charge on profits, which is designed to replace the banking levy, has proved particularly unpopular with challenger banks, who argue it hits them disproportionately harder than it does the bigger players.
"The introduction of the bank tax surcharge created a position whereby the small non-systemic banks are effectively subsidising the reduction in the bank levy which applies to the too big to fail banks," Paul Lynam, chief exec of Secure Trust Bank, told City PM
Rishi Khosla, co-founder and chief executive of OakNorth, added: "Replacing the bank levy which only applied to big banks with the surcharge, which applies to all banks – even those that had nothing to do with the financial crisis and pose no systemic risk – is a backward step."
The £2.1bn figure includes an additional £1.9bn forecast to be coming in between 2016-17 and 2021-22, along with a £200m boost from changes in the 2015-16 outturn figures between the two reports.