Chancellor warned bank levy changes are causing instability
Chancellor George Osborne has come under pressure to end the bank levy, as the BBA argued that the decision to regularly hike how much is paid is damaging as banks are given "minimal advance notice" about the changes.
The British Bankers' Association said that the levy "adversely affects the competitive landscape and the UK's position as a financial centrebank", noting that few other countries had a levy at all.
The charge is currently based based on taking 0.156% of a lender's liabilities, meaning that banks must pay regardless of whether or not they make a profit or loss.
A BBA spokesperson has said:
"The bank levy rate has been increased 8 times since the levy was first introduced during the 2010 budget, and many of those increases have been implemented with minimal advanced notice - the frequency of the rate change has not resulted in a stable tax environment for the banking industry and is inconsistent with the Government's desire for the UK to have a competitive, stable and predictable tax regime for business."
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