Banking tax surcharge concerns must be addressed, says Commons committee head
Concerns over a Government levy requiring banks to pay an 8% charge on profits of more than £25 million must be addressed by the Competition and Markets Authority (CMA), the head of a Commons committee has urged.
Andrew Tyrie, chairman of the Treasury Select Committee, urged the CMA to address concerns which were raised by challenger banks over the Government's banking tax surcharge, a nnounced in the Budget in July 2015.
Concerns have been raised that the move could stifle competition in the sector, with challenger banks such as Metro Bank, Secure Trust Bank and Shawbrook slapped with sharp increases to their tax bills.
In a letter to the CMA, which is carrying out a review of the retail banking sector, Mr Tyrie said: "There is widespread concern about the effects of the banking tax surcharge on competition.
"The causes of inadequate banking competition extend well beyond tax.
"But the introduction of the surcharge may be adding to the already long list of problems facing challenger banks. The balance is tilted in favour of incumbents and against new entrants."
In February, the CMA's preliminary findings report said that "no strong evidence" exists that the surcharge would limit competition or push new entrants out of business.
Mr Tyrie added: "The CMA, after Treasury committee pressure, produced an analysis of the surcharge in February, finding that it was unlikely to be a barrier to entry or expansion.
"Some disagree with this assessment, including the challenger banks themselves.
The treasury committee will scrutinise the CMA's conclusions closely."
The CMA's final findings are due to be released in August.