Osborne says the new tax will help to raise revenues from banks including the smaller ones to cushion any fall in case of financial crises.
It is being speculated that the profit tax will have sharper implications on the earnings of banks in 2016.
The government’s move to remove bank levy is seen as an attempt to woo back larger banks, including HSBC and Standard Chartered which threatened to move their headquarters overseas due to high UK taxes and excess regulations.
While the roll back of the bank levy is expected to be helpful for HSBC and Standard Chartered, the new surcharge is expected to hit the smaller banks hard.
The Financial Times quoted KPMG tax expert Tom Aston as saying: "All banks are going to be paying an extra 8%. But some banks are happy because it’s a price well worth paying for a significant reduction in the bank levy.
"I’d see today as not a gift to the banking sector but a rolling back of a series of bad news events."
The UK Treasury backed the surcharge saying it would help the country improve the competitiveness of the banking sector.
Image: UK scrapped the bank levy after HSBC and Standard Chartered threatened to move their headquarters out of the UK. Photo: courtesy of Danesman1.
