Budget Resolution — The Bank Levy — 25 Mar 2014 at 18:47

The majority of MPs voted in favour of increasing the rate of the bank levy tax and in favour of changes aimed at improving the operational efficiency of the levy.

The motion approved in this vote was:

• That provision (including provision with retrospective effect) may be made about the bank levy.

The Bank levy was introduced by Schedule 19 of the Finance Act 2011^[1]; it raises a tax on banks based on their total applicable liabilities and equities.

This vote followed the 2014 Budget^[2] in which the following changes to the Bank Levy were announced:

• limit the protected deposit exclusion to amounts insured under a deposit protection scheme

• treat all derivative contracts as short term

• restrict relief for a bank’s High Quality Liquid Assets to the rate applicable to long-term liabilities

• align the bank levy definition of Tier One capital with the new Capital Requirements Directive from January 2014

• exclude liabilities in respect of collateral that has been passed on to a central counterparty from January 2014

• widen legislation-making powers within the bank levy from January 2014 to ensure it can be kept in line with regulation

and

• The government will set the full rate of the bank levy at 0.156% from 1 January 2014, up from the January 2013 rate of 0.105%

The amount forecast to be raised via the bank levy was £2.7bn in 2014/15, up from £2.3bn in 2013-14.

This vote was on Finance Bill resolution number 79^[4]. Finance Bill resolutions are are also known as budget resolutions or budget motions.

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• [1] Schedule 19 of the Finance Act 2011 which provides for the Bank Levy
• [2] Budget 2014: documents
• [3] 2013 Bank Levy rate change
• [4] Notes on the March 2014 Budget Resolutions

Debate in Parliament | Source |