A Budget tax raid on Britain’s banks would land on every mortgage holder, saver and small business in the country, and hand rival financial centres a prize they’ve spent years chasing, warns the CEO of deVere Group, one of the world’s largest independent financial advisory organisations.
The comments from Nigel Green come as senior banking executives signal that Chancellor John Healey is preparing to raise taxes on the sector in his first Budget on 28 October, with lenders’ shares falling as markets brace for the hit.
He says: “Raising bank taxes might look like an easy win on a Treasury spreadsheet, but it’s a tax on lending, and lending is how Britain grows.
“Every extra pound taken from the banks is a pound that doesn’t go into a first-time buyer’s mortgage, a growing firm’s overdraft, or the tech that keeps UK finance ahead of the world.
“You can’t call the banks the crown jewels of the economy one week and reach for their wallets the next.”
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The sector is hardly undertaxed. Tax paid by banks rose 8.5% to £39.1bn in the 2025/26 tax year.
On top of standard corporation tax, lenders pay a 3% surcharge on profits above £100m, taking their rate to 28%, as well as a separate levy on their balance sheets.
The Chancellor’s options include restoring the surcharge to 8%, where it stood before a 2023 cut that coincided with corporation tax jumping from 19% to 25%. Trade unions estimate the move would raise £9bn over four years. He could also lift the bank levy.
Supporters of a raid point to the roughly £15bn in profit the four biggest lenders made in the first half of this year, much of it driven by the wider gap between lending and savings rates.
Nigel Green says: “Bank margins swell and shrink with the interest rate cycle.
“A tax rise set during the fat years stays in place through the lean ones. Locking in a permanent burden on the back of cyclical profits is poor policy, however tempting the numbers look today.
“Capital has never been more mobile. Global banks decide where to book business, hire people and deploy capital by comparing jurisdictions down to the decimal point.
“Financial centres in the US, the Gulf and Asia are actively courting the talent and investment London has spent decades building.
“Britain shouldn’t be making their pitch for them.”
The deVere CEO stresses that the cost of a raid won’t stay with the banks.
“Borrowers pay through pricier loans, savers through thinner returns, and millions of ordinary people through pension funds and ISAs that hold bank shares and rely on their dividends.
“A tax sold as hitting the City ends up hitting households.”
Nigel Green argues the Budget is a chance to back one of the UK’s genuine global strengths.
“Britain leads the world in fintech, it’s pushing hard into AI-driven financial services and digital assets, and finance remains one of the few industries where this country is a true heavyweight. The government should be encouraging the banks to lend more, invest more and compete harder, then funding public services from the growth that follows.
“A thriving, expanding sector is likely to deliver far more to the Exchequer over the next decade than any one-off grab.”
Healey has said he has decisions to take and has praised the banks as being woven into the fabric of the economy.
The deVere CEO believes the Budget is the moment to prove he means it.
He concludes: “If the Chancellor leaves bank taxes alone on 28 October and sends a clear signal of stability, he’ll get more lending, more investment and, over time, more tax revenue.
“It’s a far better deal for Britain than a raid that weakens the very industry he’s relying on to deliver growth.”
