This year's Total Tax Contribution Study for the UK banking sector, commissioned by UK Finance and based on analysis by PwC, found that the UK banking sector paid £39.7 billion in taxes in the financial year to March 2019, a new PwC and UK Finance report has found, with banks seeing a 50 per cent rise in taxes borne over the past five years.

The report found that the banking sector's tax contribution accounted for 5.5 per cent of total UK tax receipts. Half of this contribution was paid by foreign-headquartered banks and the other half by UK-headquartered banks. Employment taxes accounted for £21.8 bn of the total taxes paid by the sector, equivalent to 7.3 per cent of all UK employment tax receipts, reflecting the large number of highly skilled workers employed in the banking industry. 

The report also includes analysis of the UK's tax competitiveness for banking relative to other leading global financial centres. London continues to have the highest total tax rate for a typical corporate and investment bank out of the three major financial services centres surveyed. The rate in London is 47.1 per cent, 13.6 percentage points higher than New York City (33.5 per cent) and 2.4 percentage points higher than in Frankfurt (44.7 per cent).