Banks fear £14bn windfall tax raid by Reeves to fill 'black hole' in the UK's finances

Treasury source hints at Corporation Tax rise in Autumn Statement

Bank bosses concerned over potential impact on lending

The UK's banks are braced for a £14 billion windfall tax raid by Chancellor Rachel Reeves in a bid to plug a 'black hole' in the nation's finances, it has been reported.

The Treasury did not comment on the claims. However, a Treasury source told the Financial Times that corporation tax could rise in the Autumn Statement.

The move comes as the government grapples with soaring energy prices and the ongoing cost of Covid-19, which has left a £400bn hole in the public finances.

• Banks fear the tax raid could hit their profits and make it more difficult to lend to businesses and consumers.
• The tax would be levied on banks' profits, which have soared in recent months due to rising interest rates.
• The Treasury is understood to be considering a one-off tax, rather than a permanent increase in corporation tax.

Bank bosses are said to be concerned about the potential impact of the tax on lending. They argue that it could make it more expensive for businesses to borrow money, which could stifle economic growth.

The Treasury is expected to announce its plans in the Autumn Statement, which is due to be published on October 31.

Conclusion

The potential windfall tax on banks is a controversial move that has divided opinion. Some argue that it is a necessary measure to help the government balance the books. Others argue that it will harm the economy and make it more difficult for businesses to borrow money.

The Treasury is expected to provide more details on its plans in the Autumn Statement. It will be interesting to see how the markets react to the news and whether the government is able to push through the tax.

Only time will tell what the long-term impact of the windfall tax will be. However, it is clear that the UK's banks are facing a period of uncertainty.