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HMRC internal manual

Bank Levy Manual

Introduction: structure: steps for determining the amount of the bank levy: step 6

Paragraph 6(2) of Schedule 19

There will be occasions where the chargeable period for the bank levy is not a 12 month period of account. In these cases an adjustment to the amount of bank levy due is needed to reflect the length of period that it covers.

The adjustment is undertaken once the steps 1- 5 in paragraph 6(2) have been carried out.

So, once the correct proportions of long term and short term chargeable equity and liabilities that remain after Step 5 have been identified for each type:

  1. Divide the figures by 365, and
  2. Multiply that numbers by the number of days in the chargeable period.

Note: special provisions apply to periods that begin before 1 January 2011 - see BKLM154800.

Example: 15 month period of account to 31 March 2014

Equity and liabilities chargeable to the levy from 15-month period to 31 March 2014 balance sheet for bank X are £500bn.

Levy at 0.105% on the £300bn short term liabilities will be £315m.

Levy at 0.0525% on the £200bn equity and long term liabilities will be £105m.

But, as this is a 15-month period of account, we will need to gross up the bank levy to reflect this, so the bank levy charge will become

£420m x 15/12 = £525m.

The full bank levy of £525m is brought into charge. 

However as the chargeable period is greater than 12 months the bank levy will be apportioned between and returned in more than accounting period of the responsible entity - see BKLM431000.

Twelve month periods of account are dealt with at Step 7 - See BKLM154700.