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.
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.
The measure will have effect from 1 January 2016.
The power to provide double taxation relief for the bank levy is included in Part 7 of schedule 19 to the Finance Act 2011.
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)
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The Office for Budget Responsibility will include the impact of this measure in its forecast in Autumn 2016.
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.
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.
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.
If you have any questions about this change, please contact Steven Tovey on Telephone: 03000 542 532 or email: firstname.lastname@example.org
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.