Chancellor George Osborne has announced a new permanent tax levy on bank bonuses and said that increased investment in combating tax evasion will boost Treasury coffers by £7bn.
Presenting his long-awaited comprehensive spending review, Osborne said that the bank levy, the details for which will be announced tomorrow, would bring in more tax revenues each year than last year’s one-off tax on bank bonuses, introduced by the previous Labour government.
Osborne also said that he expected UK banks to sign up to a code of conduct on tax evasion by the end of next month.
He also announced a 33% cut in the Treasury’s budget over the next four years.
Central government departments’ administrative budgets would be cut by a third, part of a drive to help squeeze £6bn of savings from Whitehall.
Osborne also revealed changes in local government finance, saying that ring-fencing of local government revenue grants will end from April 2011.
“The banking levy may be appropriate currently but the UK must stay globally competitive and not drive these businesses offshore,” said ACCA head of taxation Chas Roy-Chowdhury.
“We need to keep our finger on the global pulse taking this forward.”