> ## Content Index > Fetch the complete content index at: https://www.theglobalbanker.com/llms.txt > Use this file to discover other available public pages before exploring further. # UK Budget doubles bank surcharge to 6% for 15 months to fund energy support - URL: https://www.theglobalbanker.com/uk-budget-doubles-bank-surcharge-to-6-for-15-months-to-fund-energy-support/ - Published: 2026-10-28T18:54:57.000Z - Updated: 2026-10-28T20:34:48.000Z - Description: Finance minister John Healey is doubling the surcharge on bank profits to 6% from 3% for 15 months, a rise the finance ministry estimates will raise £1.5 billion. - Author: TGB Editorial Team - Tags: Regulations, Europe, #newsroom Britain is to double the tax surcharge on banks to 6% for 15 months, finance minister John Healey said on Wednesday as part of his first budget, Reuters reported. Healey confirmed a "time limited" tax rise on the UK banking sector to help fund the government's energy support package. The surcharge sits on top of corporation tax. The increase lifts the surcharge that banks pay on profits above a set threshold from 3% to 6%. It will begin in January and last for 15 months, and will raise £1.5 billion in total, according to estimates by the finance ministry. Including corporation tax, bank profits will be taxed temporarily at a total rate of 31%. ## PAYING FOR ENERGY SUPPORT Healey framed the increase as paving the way for energy support, which will include a VAT cut on electricity. The government will hand out a direct payment of £100 (US$133) to 20 million households, as gas and electricity prices surge in large part owing to the Middle East conflict. Further measures to lower household bills include removing fixed fees on gas bills and extending a freeze on fuel duty. "Amid global economic storms, I am looking to our banks to help fund breathing space for British families," Healey told parliament. He also said he was grateful for the role the banks play. The banking industry had lobbied hard against any increase, arguing it could curb lending, but Healey said it would help British people cope with the challenging economic environment. ## HOW THE SURCHARGE WORKS According to Hargreaves Lansdown, banks pay the surcharge alongside the standard 25% corporation tax, together with two annual levies: the Bank Levy and the Bank of England Levy. When UK corporation tax rose from 19% to 25% in 2023, the government cut the banking surcharge from 8% to 3% to help the banks, Hargreaves Lansdown noted. The surcharge applied after a £100mn allowance and only to profits within the UK corporation tax net, so banks with a large overseas presence were sheltered to some degree, according to Hargreaves Lansdown. The new rise partially reverses that cut, Reuters said. ## BANK SHARES RALLY The bank tax increase was lower than had previously been expected, leading to a rally in UK bank stocks. Lloyds shares rose four per cent to 104.40p following Healey's announcement, while Barclays was up 3.7 per cent to 437.85p and NatWest gained four per cent to 660.80p. "The fixed end date matters as much as the size, because it turns a potential reset of bank earnings into a one-off charge," said Angeline Ong, analyst at IG, adding that investors appeared to be reading it as a bump rather than lasting damage to their earnings base. ## INDUSTRY AND UNIONS UK Finance, the industry lobby group, has said Britain already taxes banks higher than in other major financial centres. It estimated in a report this month that the UK banking sector paid £25.7 billion in direct taxation in the year to end-March. Some banks are assumed to move profits out of the UK in response to the higher rate, and the Office for Budget Responsibility warns that the size of profits lost is uncertain. British trade unions had lobbied for an even bigger tax hike, citing fairness and banks' record profits.