Banking

John Glen says UK financial services needs ‘competitive tax rates’ – reports

The sector is currently subject to an 8% tax surcharge, which was introduced in 2015, on top of the corporation tax rate of 19%.

While the economic secretary to the Treasury said he could not promise that Chancellor Rishi Sunak would cut the 8% surcharge in his next Budget, Glen did say that Sunak was “thinking very carefully” about the tax rates that apply to UK financial services firms.

In an interview with the FT, Glen said: “To be competitive, we have to have competitive tax rates and that is what is on the chancellor’s mind at the moment.”

Sunak announced a hike in corporation tax to 25% from 2023 in his Spring Budget in March this year, although he confirmed that only firms with profits over £250,000 would be taxed at the higher 25% rate.

Spring Budget 2021: Chancellor hikes corporation tax to 25% from 2023

Glen, who is preparing for a visit to the US, also confirmed that the cap on bankers’ bonuses is “under review” following Brexit.

However, he added in his interview with the FT that it is “not something we are imminently seeking to make an announcement on”.

The chancellor is due to deliver the Budget on 27 October.

Glen told the FT that he wanted an “efficient and effective marketplace” for financial services “in the context of the global marketplace”.

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