Bank stocks tumble as Rachel Reeves 'could raid profits' in Budget after abandoning income tax hike
Bank stocks took a hit today amid fears Rachel Reeves is set to mount a brutal raid their profits in the Budget.
Barclays, Lloyds and HSBC shares were all down more than 2 per cent this morning as they headed a wider sell-off on markets.
The Chancellor is scrambling for ways of raising tens of billions of pounds next week after humiliatingly abandoning plans to hike income tax.
She is thought to be looking at a 'Smorgasbord' of increases, hammering the 'wealthy', pensioners and savers.
The Treasury had appeared to play down the prospect of ramping up the so-called 'banking surcharge' - a higher rate of corporation tax that has been levied since the Credit Crunch.
Barclays , Lloyds and HSBC shares were all down more than 2 per cent this morning as they headed a wider sell-off on markets
Chancellor Rachel Reeves is scrambling for ways of raising tens of billions of pounds next week after humiliatingly abandoning plans to hike income tax
It was initially an 8 percentage point bump after the financial crash, before being reduced to 3 percentage points in 2023 when overall rates were increased.
However, sources have told the Telegraph that changing the surcharge is back on the table as the Chancellor's problems mount.
The idea was previously by Angela Rayner when she was Deputy PM as a way of avoiding taxes on working people.
Insiders have acknowledged that Ms Reeves might need to bring in as much as £40billion on November 26 to stabilise the finances.
In one of the biggest-ticket revenue-raisers, Ms Reeves is poised to keep the long-running freeze on thresholds in place for another two years.
The policy would net the Treasury more than £8billion a year.
But the boost to the government's coffers would come at a huge cost for Britons, with more than 10 million people facing paying the top rate of tax by the end of the decade. Some couples' tax bill will be £1,300 higher than if the policy finished as previously scheduled.
The worse-off will also be hammered, with a full-time worker earning the minimum wage seeing their annual tax bill rise £137 relative to the current policy of increasing thresholds in line with inflation.
For the first time, all pensioners will be hit with tax on the full state pension in 2027-28 - so the state is effectively giving with one hand and taking with the other.
