The ABFA is concerned that the bank levy is only going to hurt the UK's competitiveness. The introduction of the levy will penalise the UK, and even though France and Germany have followed suit, unless all major economies impose a similar levy, the UK could risk becoming less attractive for banks. The complexity of the lending markets also means that whilst our members actively supported SMEs to the tune of £14.1 billion last year, the introduction of this new tax could well make future funding for UK businesses more difficult. This would mean instead of penalising the banks, the levy could actually have a knock-on effect on British business.
The ABFA though does applaud this emergency budget for supporting the general business environment and SMEs in particular. Policies such as reducing corporation tax, reducing the rate for capital allowances and sector specific policies helping tourism and manufacturing will all benefit SMEs and the wider UK economy.
We particularly look forward to seeing the detail on the new tax scheme to help regional start-up businesses, as our latest member research indicates the one thing which the new coalition government could do to support firms the most is delay tax payments.