Banks

BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

Continue Reading

Economy

Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

Continue Reading

Currencies

Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

Continue Reading

Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

Continue Reading

Banks

Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

Continue Reading

Categorized | Financial

Financial services tax take drops


Posted on December 19, 2012

Corporation tax payments from the financial services sector fell by a quarter in 2011-12 to £5.4bn, as the tax rate fell and profitability was hit by the European debt crisis and provisions for mis-selling payment protection insurance.

The decline, which saw the sector paying less than half the £12.4bn it paid at the peak in 2008, made it the second largest payer of corporate tax behind the oil industry, according to an annual study published by the City of London Corporation.

    In a sign of the effects of recent changes to the tax system, the declining corporation tax payments were offset by increased payments of irrecoverable value added tax, national insurance and other indirect taxes, according to PwC, the consultancy that prepared the study.

    A total of £63bn of tax was borne and collected by the sector in 2011-12, unchanged from 2010-11. The sector’s share of the UK’s total tax take fell slightly from 12.1 per cent to 11.6 per cent.

    Mark Boleat, policy chairman at the City of London Corporation, said: “These figures demonstrate the significant contribution that the UK financial services industry continues to make in terms of taxes and jobs even in this difficult economic environment.”

    Payments by banks, which are the largest component of the financial services sector, fell particularly sharply from £3.5bn to £1.3bn in the year to 2012. A levy on bank balance sheets contributed £1.6bn but its full impact will only be apparent in next year’s figures.

    Employment in the sector remained constant from the previous financial year at 1.1m (3.8 per cent of the workforce), and accounted for £27.7bn, 11.8 per cent of total employment taxes.