Chancellor John Healey prepares to raise taxes on Britain's banks

The story

Britain's biggest banks look set to pay more tax when Chancellor John Healey delivers his first budget on 28 October. Senior banking figures have said the sector is firmly on the menu, and reports this week said Healey is preparing to act.

The pressure has been building since the summer. The campaign group Positive Money found that the four largest UK banks, HSBC, Barclays, Lloyds and NatWest, made more than £29.2bn in profit in the first half of 2026. That was about 21% more than in the same period last year.

One option is to reverse a 2023 change that cut the extra surcharge banks pay on top of corporation tax from 8% to 3%. Estimates of how much that would raise range from about £2bn to £3bn a year. Healey could also raise the bank levy, a small charge lenders already pay, or limit how far banks can use old losses to shrink their tax bills.

Campaigners want him to go further. Positive Money has pushed for a windfall tax that it says could bring in about £19bn, which it argues would more than cover Prime Minister Andy Burnham's cost of living measures.

The banks are pushing back. They say they already pay more tax than most companies, that a bigger bill would leave them less able to lend, and that today's strong profits, which owe a lot to higher interest rates, will not last.

Healey has called the banks part of the crown jewels of the UK economy, but he has also said he has decisions to take in the budget. The final shape of any new tax will only be clear when he stands up in the Commons.