9 Feb 2011

British banks to pay higher tax

6:35 am on 9 February 2011

The British government has announced a tax increase on banks, amid continuing public anger over their role in the credit crisis and the size of bonuses paid to some bankers.

The government was forced to use taxpayer cash to bail out Lloyds Banking Group and Royal Bank of Scotland and prop up the banking system during the financial crisis.

It is now bringing forward a planned rise in the tax that had been due to be phased in. Instead, the tax will begin at the full rate.

The levy will raise an extra £800 million this year.

Chancellor of the exchequer George Osborne say the increase is being brought forward because the banks are in a better financial position than expected, the BBC reports.

Banking executives have reacted to the proposal with anger.