Policy paper

Bank levy double taxation relief (single resolution fund levy)

Published 16 November 2016

Who is likely to be affected

UK banking groups operating in Eurozone countries through a subsidiary and banks based in Eurozone countries who operate in the UK through a permanent establishment that are within scope of the bank levy.

General description of the measure

Since 1 January 2015 all EU Member States have been bound by the Bank and Resolution Directive (BRRD). One of the key elements of the BRRD is the establishment of a new levy in Eurozone states to fund a Eurozone Single Resolution Fund. The UK is satisfying its obligations under the Directive by raising contributions through its existing levy on banks’ balance sheet liabilities.

In some circumstances the Single Resolution Fund levy overlaps with the UK bank levy and gives rise to instances of double taxation. This measure will give relief for instances of double taxation between the UK bank levy and the Single Resolution Fund levy following its introduction.

The relief is effective from 1 January 2016.

Policy objective

This measure will give relief for instances of double taxation between the UK bank levy and the Single Resolution Fund levy, consistent with the government’s general policy on avoiding double imposition of taxation.

Background to the measure

This measure was announced at Summer Budget 2015. Draft legislation was shared with affected banks for consultation over summer 2016.

Detailed proposal

Operative date

The measure will have effect from 1 January 2016.

Current law

The power to provide double taxation relief for the bank levy is included in Part 7 of schedule 19 to the Finance Act 2011.

Proposed revisions

This measure will be made by statutory instrument using the power to make regulations within paragraph 67 of schedule 19 to the Finance Act 2011.

Summary of impacts

Exchequer impact (£m)

2016 to 2017 2017 to 2018 2018 to 2019 2019 to 2020 2020 to 2021 2021 to 2022

The Office for Budget Responsibility will include the impact of this measure in its forecast in Autumn 2016.

Economic impact

This measure is not expected to have any significant macroeconomic impacts.

Impact on individuals, households and families

The measure is not expected to impact on family formation, stability or breakdown.

Equalities impacts

The measure is not expected to have a direct or disproportionate impact on any of the protected equality groups.

Impact on business including civil society organisations

This measure is expected to have a negligible impact on businesses. It will only affect a small number of banking businesses with liabilities in excess of £20 billion and are UK groups operating in the Eurozone through a subsidiary or Eurozone banks operating in the UK through a Permanent Establishment. Affected businesses will incur a negligible one-off cost to familiarise themselves with the new rules and there are not expected to be any additional on-going costs. This measure is not expected to have any impact on civil society organisations.

Operational impact (£m) (HMRC or other)

There will be no significant impacts.

Other impacts

Competition assessment: the scope of the bank levy has been specifically designed to ensure a level playing field for all those affected by it in the UK.

Monitoring and evaluation

This measure will be kept under review through communication with affected taxpayer groups. Receipts from the bank levy are being monitored on an ongoing basis.

Further advice

If you have any questions about this change, please contact Steven Tovey on Telephone: 03000 542 532 or email: steven.tovey@hmrc.gsi.gov.uk


Jane Ellison MP, Financial 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.