Why the City isn’t buying a ‘time-limited’ bank tax hike

John Healey may have opened Pandora s Box with an increase to the UK bank surcharge. Samuel Norman looks at whether he will resist the temptation to extend it. Few things in British politics have proved to be as permanent as a “temporary” tax. When the Conservatives introduced the 25 per cent energy profits levy in 2022, it came with a strict December 2025 sunset clause. Six months later, the deadline slipped to 2028. By 2024, under a Labour government, it was extended to 2030 and hiked to 35 per cent. The old Whitehall trick even applies to income tax, which itself arrived in 1842 as an emergency three-year measure, yet survives nearly two centuries later on rolling annual renewals. It is little wonder that the City has already switched into defensive mode after Chancellor John Healey’s “time-limited” hike to the banking surcharge. While the Budget document insisted there would be legislation for the time-limited period and it would “not be extended,” it has done littl