New �2.5bn bank tax proposals confirmed

Plans to raise 'maximum sustainable revenues' from the banking sector were confirmed in yesterday's spending review.

A permanent bank tax, first announced in the emergency budget in June, aims to raise about �2.5bn a year, with draft legislation expected on October 21.

The tax will force banks to pay penalties based on their net worth, which is seen as a way of taxing risk rather than profits, and is expected to be introduced from January 1.

George Osborne said the levy would raise 'maximum sustainable revenues', but without driving banks out of the country.

It would also go further than the previous government's temporary tax on bankers' bonuses, which raised about �2bn.

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Mr Osborne said: 'The government wants the UK to be one of the most competitive global centres for financial services.

'But it is only right that during difficult times, steps are taken to ensure that the banks make a full and fair contribution.'

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