You can use the search function to find a range of UK Finance material, from consultation responses to thought leadership to blogs, or to find content on a range of topics from Capital Markets & Wholesale to Payments & Innovation.
UK Finance today releases its 2025 Total Tax Contribution of the UK banking sector and international tax comparison report, the eleventh edition of this report.
International comparison The report looks at the total tax rate of a model bank operating in the UK and other leading global financial centers. This aims to provide a holistic comparison of the banking tax environment in London compared to Amsterdam, Frankfurt, Dublin and New York. The 2025 total tax rate figures are:
The London total tax rate of 46.4 per cent is 0.6 percentage points higher than in 2024, driven by changes to employer’s National Insurance Contributions (NICs) from April 2025. The rates for Frankfurt, Amsterdam, and Dublin increased by 0.3, 0.2, and 0.1 percentage points respectively, and New York remained unchanged.
Looking ahead to 2026, the total tax rate in London is projected to increase slightly to 46.6 per cent reflecting the full-year impact of the changes to employer NICs, with the other jurisdictions remaining unchanged.
Many of the UK’s principal international competitors in financial services (notably the US, Switzerland, Singapore and the UAE) do not impose banking-specific taxes, whereas the bank surcharge and the bank levy have become permanent features of the UK tax regime. Removing both would potentially reduce the London 2026 total tax rate to 40.0 per cent.
Tax contribution to government
The report also contains the latest estimate of the total tax contribution of the UK banking sector, estimated to be £43.3 billion for the financial year to the end of March 2025.
The overall tax contribution has increased by a third since the study started in 2014 when it was £33.4 billion.
The total is made up of £23.1 billion in taxes borne, including corporation tax and the bank levy, and £20.2 billion in taxes collected, including income tax and employee NICs.
Across the UK, the banking sector employs highly skilled workers, and employment is an important way in which the sector contributes to the UK economy. Employment taxes (income tax deducted under PAYE, employer and employee NICs and the apprenticeship levy) amounted to £24.1 billion, equivalent to 5.5 per cent of all employment tax receipts.
Government figures show that corporation tax from the banking sector (including the bank surcharge) and the bank levy were £11.1 billion, representing 11.4 per cent of total receipts from all corporate taxes.
David Postings, Chief Executive of UK Finance, said:
This report demonstrates that the UK banking sector is a major contributor to the public finances, with over £43 billion paid in taxes last year. But it also shows that banks operating here face a total tax rate significantly higher than in other global financial centres. “Uncertainty around future bank taxation, combined with permanent sector-specific taxes, sends a negative signal to international investors. “A strong economy needs strong banks. To help drive growth and investment the focus should be on delivering the Leeds Reforms, combined with a supportive tax regime, which will put the sector in the best position to support the wider economy.
This report demonstrates that the UK banking sector is a major contributor to the public finances, with over £43 billion paid in taxes last year. But it also shows that banks operating here face a total tax rate significantly higher than in other global financial centres.
“Uncertainty around future bank taxation, combined with permanent sector-specific taxes, sends a negative signal to international investors.
“A strong economy needs strong banks. To help drive growth and investment the focus should be on delivering the Leeds Reforms, combined with a supportive tax regime, which will put the sector in the best position to support the wider economy.
Government figures report that in the financial year 2024 to 2025, corporation tax receipts from the banking sector were £8.8 billion; bank levy receipts were £1.3 billion; and bank surcharge receipts were £1.0 billion – a total of £11.1 billion. Separate
government figures report that total corporate tax receipts for the financial year 2024 to 2025 were £97.2 billion.
15.10.25
14.11.25
13.11.25
By downloading this document, you understand and agree that any sharing, distribution or republishing of the content, without prior written authorisation from the author or content managers at UK Finance, shall be constituted as a breach of the UK Finance website terms of use.
