As the U.K. approaches Wednesday’s Budget, banking trade body UK Finance puts a model London bank’s tax rate at 46.2%, the highest in a five-center comparison that excludes Paris.
Prepared by PwC, the 2026 comparison lists Amsterdam at 42.2%, Frankfurt at 39.1%, Dublin at 29% and New York at 27.9%. The figures apply to a model bank in each location, and London ranks highest only among those five centers.
The Guardian reported that the Trades Union Congress (TUC) and campaign group Positive Money criticized Paris’s omission. UK Finance told the newspaper it had considered Paris but could not produce a robust like-for-like rate using its model. Paul Nowak, the TUC’s general secretary, told The Guardian: “This is a misleading attempt to make the case against fair taxes.”
The Guardian’s separate calculations put Paris at 51.6% to 57.3%, after review by an unnamed accountancy firm. That estimate remains unverified outside The Guardian’s report.
UK Finance revised its London figure to 46.2% from 46.5% after reviewing how its model handled the bank surcharge allowance. The trade body says the bank surcharge, bank levy and uncapped National Insurance contributions drive the U.K.’s higher total tax rate.
The model rate differs from the sector’s overall tax contribution. UK Finance estimates that contribution at £47.8 billion for the financial year ending March 2026, equal to about 4.3% of government tax receipts. It counts £25.7 billion in taxes borne by banks and £22.1 billion collected on the government’s behalf.
HM Revenue & Customs (HMRC) separately reports £39.1 billion in banking-sector receipts for financial year 2025-26. Its measure includes PAYE, Corporation Tax, the Bank Levy and the Bank Surcharge, but excludes irrecoverable VAT and Insurance Premium Tax. The two totals cover different tax scopes and are not directly comparable.
The Bank Surcharge is 3% on relevant profits above a £100 million allowance, following a reduction from 8% in April 2023. The TUC estimates restoring the earlier rate could raise £2.25 billion annually, while UK Finance has argued for tax stability. Chancellor John Healey is due to present the Budget on Wednesday, Oct. 28.
