The U.K. will raise the Bank Corporation Tax Surcharge from 3% to 6% for 15 months starting Jan. 1, 2027, seeking revenue for household and business support as energy bills rise.
The Budget scorecard projects £305 million in additional revenue in 2026-27, £950 million in 2027-28 and £220 million in 2028-29. Together, those figures total £1.475 billion, which HM Treasury rounds to £1.5 billion for the temporary increase.
Banks bear the surcharge, while HM Treasury says the added revenue will help fund support for households and businesses. The Budget describes a £2.6 billion Household Energy Payment program, including £100 for households in council tax bands A to D in England. The government expects the payment to support up to 20 million households from January 2027.
The 6% rate will apply to chargeable profits above a £100 million group allowance and is scheduled to run through March 31, 2028. The surcharge is due to return to 3% on April 1, 2028. The Budget links rising energy bills to the conflict in the Middle East.
Reuters reported that analysts had discussed an 8% rate or a smaller increase of two to three percentage points. Reuters later described the announced 6% rate as below what some had feared; the 8% figure was an analyst scenario, not a formal Budget proposal.
Chancellor John Healey said banks should help provide “breathing space for British families.” The government plans to legislate the change in Finance Bill 2026-27.