In summary, PwC estimate the total tax contribution of the UK banking sector to be £43.3 billion for the financial year to the end of March 2025, representing 4.3 per cent of total UK government tax receipts. The overall tax contribution has increased by a third since the study started in 2014 when it was £33.4 billion. 

The UK’s total tax rate of the model corporate and investment bank has ticked up again this year by 0.6 percentage points, to 46.4 per cent, driven by changes to employer’s National Insurance Contributions (NICs) from April 2025. London’s rate remained higher than other financial centres including New York (27.9 per cent), Dublin (28.9 per cent), Frankfurt (38.9 per cent) and Amsterdam (42.2 per cent). 

Our report demonstrates the stable and significant revenue the sector provides to the public finances, a trend which has seen the banking sector contribute on average more than £40 billion annually in taxes over the last five years. 

Policymakers should consider our analysis, including the comparison with other key financial centers, in the context of the Leeds Reforms and Financial Services Growth and Competitiveness Strategy (FSGCS). As one of the eight key growth-driving sectors in the Industrial Strategy, financial services has been placed front and center of efforts to support growth in the UK economy. 

The FSGCS launched in July, and the Government used it to set out its ambition for the UK to ‘once again be the global location of choice for financial services firms to invest, innovate, grow, and sell their services throughout the UK and to the world’.

While the UK has many advantages as a financial services centre, taxation of the banking sector remains a critical risk for UK competitiveness. As we set out in our Plan for Growth earlier this year, addressing tax policy will be key to creating a pro-growth operating environment for financial services firms. The tax system has to support investment, not only in public services, but in growth.

By maintaining a proportionate and competitive tax regime, we can attract overseas businesses to invest and grow in the UK, as well as supporting our homegrown businesses, that are better able to compete internationally and drive export growth.

As we work with government and the financial services industry to realise the goals of the FSGCS and Industrial Strategy, UK Finance will continue to advocate for a globally competitive UK tax environment for financial services.