UK banks to pay extra US$6.3b tax in next five years

[LONDON] Britain's banks will pay an extra 4 billion pounds (US$6.3 billion) in taxes over the next five years due to changes announced by Finance Minister George Osborne in his autumn statement.

Osborne said he would change rules which enable banks to offset losses from the financial crisis of 2007 to 2009 against tax on profits for years to come, which meant some banks wouldn't be paying tax for 15 or 20 years.

"The banks got public support in the crisis and they should now support the public in the recovery. I am today limiting the amount of profit in established banks that can be offset by losses carried forward to 50 per cent and delaying relief on bad debts," Mr Osborne said.

The FTSE 350 Banking Index fell and was down by 0.6 per cent by 1305 GMT. Barclays was down by 1.4 per cent, Lloyds fell 0.3 per cent and Royal Bank of Scotland was down by around one per cent.

REUTERS