Banks’ deferred tax assets come under the spotlight
3 December 2014
Wayne Weaver, banking tax partner at Deloitte, said: “Banks will only be allowed to shelter half of their profits from tax by using brought forward losses, from 1 April 2015. This will ensure that banks pay some corporation tax when they make profits and is expected to increase the tax take from the banking sector by approximately £700 million each year. A number of other countries already have similar restrictions on offsetting tax losses as part of their tax system; although the UK version will only apply to banks.
“Banks continue to be one of the Chancellor’s favourite sources of new tax revenues. Whilst corporation tax receipts from banks have fallen substantially since the financial crisis, this is largely due to the sector being significantly less profitable; banks also now contribute almost £3 billion of bank levy each year. Some banks will now need to reassess the value of their deferred tax assets for accounting and regulatory capital purposes, although recent regulatory changes mean that the capital impact should be less severe than in previous years.”
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Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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