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Wednesday
Nov172010

Corporation Tax Drop for Banks Saves Them from New Bank Levy

Many people are disappointed and frustrated over the role the banks have played in the recent recession. While many are struggling to get by, the banks are seemingly going from strength to strength while some have been bailed out by the government.

But towards the end of October it was announced that British banks would now have to pay a banking levy. In total this is expected to amount to £2.5 billion every year, helping to cut down the deficit no doubt. This will please some, but it should be taken into context with regard to the cut in Corporation Tax that will also be coming into play over the next few years.

It is believed that the banks will eventually be better off as a consequence of these two moves. Once the reduction in Corporation Tax is complete, the bank levy will probably lead to some of the major banks actually doing better as a result. Of course the bank levy will only affect banks whereas the Corporation Tax cuts will affect all companies. But some will no doubt feel disappointed that the banks once again seem to get by relatively unscathed.

I can understand their feelings in this matter. Many feel the banks had a significant role in the recession and are hesitant to help out now that the worst is over and we are trying to get back on our feet as a country again. The bank levy is a good move, but it would seem it might still result in the banks being better off.

If you have any questions regarding the Corporation Tax cuts for your own business, you may contact us at St Matthew now for advice.

 



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