(Draft) Tax information and impact note: Updating definitions in the Bank Levy legislation
Published 16 July 2026
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This publication is available at https://www.gov.uk/government/consultations/draft-regulations-updating-definitions-in-the-bank-levy-legislation/draft-tax-information-and-impact-note-updating-definitions-in-the-bank-levy-legislation
Who is likely to be affected
Banks and building societies within the charge to the Bank Levy.
General description of the measure
The Bank Levy legislation defines certain terms by reference to regulatory laws and rules, including terms contained within the Prudential Regulation Authority’s (PRA) Rulebook and the Financial Conduct Authority’s (FCA) Handbook.
This measure updates some definitions in the Bank Levy legislation to align with regulatory changes. It also deletes some definitions that are no longer required.
Policy objective
This measure makes technical amendments to maintain the alignment of various definitions used in the Bank Levy legislation with those used for regulatory purposes. This is to provide clarity and to ensure that the Bank Levy continues to operate as intended following regulatory changes.
Background to the measure
Draft regulations are subject to consultation from 16 July 2026 to 13 August 2026. [Outcome of the consultation to be inserted.]
Detailed proposal
Operative date
This measure will apply to chargeable periods beginning on or after 1 January 2027.
Current law
Current law is contained in Schedule 19 to the Finance Act 2011 and The Bank Levy (Loss Absorbing Instruments) Regulations 2020.
Proposed revisions
The Bank Levy legislation contains definitions which rely on terms taken from the PRA Rulebook or the FCA Handbook. Other definitions used refer to provisions in the Capital Requirements Regulation (Regulation (EU) No 575/2013) and in Commission Delegated Regulation (EU) 2015/61.
Following the Financial Services Act 2021 (FSA 2021) and the Financial Services and Markets Act 2023 (FSMA 2023), some of the relevant provisions have been, or will be, revoked and replaced by corresponding rules in the PRA Rulebook.
These regulations amend definitions currently used in Schedule 19 to the Finance Act 2011 and The Bank Levy (Loss Absorbing Instruments) Regulations 2020, so that they refer to the corresponding rules in the updated PRA Rulebook. The amendments also reflect changes made to the FCA Handbook following the introduction of the Investment Firms Prudential Regime under FSA 2021.
The regulations amend other definitions so that they refer to terms in the FCA Handbook instead of the PRA Rulebook. They also delete some definitions in the Bank Levy legislation that are no longer required.
Summary of impacts
Exchequer impact (£ million)
| 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 | 2030 to 2031 | 2031 to 2032 |
|---|---|---|---|---|---|
| Nil | Nil | Nil | Nil | Nil | Nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
This measure has no impact on individuals as it affects only bank and building society groups. This measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
This measure only affects businesses, therefore it is not anticipated that there will be disproportionate impacts on those in groups sharing protected characteristics.
Administrative impact on business including civil society organisations
This measure is expected to have a negligible business impact on around 25 bank and building society groups. One-off costs could include familiarisation with the amended rules. There are not expected to be any ongoing costs.
This measure is expected overall to have no impact on businesses’ experience of dealing with HMRC as the change does not change any processes or tax administration obligations.
This measure is not expected to impact civil society organisations.
Operational impact (£ million) (HMRC or other)
There are no operational impacts for HMRC due to these changes.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be kept under review through communication with affected taxpayer groups.
Further advice
If you have any questions about this change, please contact the Financial Services Policy Team.
Declaration
[Economic Secretary to the Treasury] has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.