The anatomy of a bank tax: what can the UK learn from Europe?

With days to go until John Healey delivers a Budget expected to target banks with a cash raid, Samuel Norman looks at the UK bank tax framework and other experiments across Europe.  For years City lobbyists managed to bat away demands for a bank tax hike. As Chancellor, despite delivering two tax-heavy Budgets, Rachel Reeves successfully saw off a clamour from her own backbenches to target the sector. But under Andy Burnham’s government and John Healey’s Treasury, times have changed. Analysts now expect a raid on the banks to be the base case in Wednesday’s Budget – and the City is bracing for impact. Thomas Pugh, chief economist at RSM, told City AM an increase to the bank levy was “probably the most likely option”. He added, depending on the remnants of Healey’s fiscal headroom and spending commitments, it may be the only major tax-raising measure introduced in the Budget. The UK banking sector paid a record £47.8bn into Treasury coffers in the year to April 2026, accordi