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UK considers added windfall taxes on oil firms and banks
The proposal is aimed at helping Chancellor John Healey close a funding gap, including a planned £4.7bn boost in revenue over four years, while also addressing a partly-eroded £22.7bn fiscal buffer.
Oil companies and banks in the UK are facing a potential new windfall tax, with a plan presented to Chancellor John Healey after bosses in the sectors posted large profits, according to OilPrice citing reporting from Bloomberg.
The outlet says Treasury officials have suggested windfall taxes could be “low hanging fruit” for increasing government receipts, potentially targeting both banks and oil companies ahead of the upcoming Budget.
OilPrice adds that Healey must find £4.7bn in extra revenue over four years to fund a defence investment plan, alongside another £10bn in cuts across departments, while a fiscal buffer of £22.7bn has partly eroded.
The Resolution Foundation, as cited by OilPrice, estimates the buffer could be as low as £8bn, a narrow margin that could leave public finances more exposed to shocks from higher energy prices, while Citigroup’s Jane Fraser warned against a new banking tax and UK Finance officials cautioned about risks to financial services.