Bank lobby faces criticism over Paris omission from London tax comparison

UK Finance has been accused of presenting a selective international tax comparison to argue against higher taxes on banks ahead of Britain’s budget. Campaigners say the omission of Paris, a major rival financial centre, weakens the lobby group’s case that London risks becoming less competitive if the government increases the sector’s tax bill.

According to the Guardian report, the figures were shared with John Healey as banks sought to influence the budget debate. The criticism concerns the selection of cities used to support the industry’s argument, rather than simply whether individual tax calculations are correct. A ranking can accurately describe its selected locations without establishing where London stands against every major competitor.

UK Finance represents lenders including Lloyds, JP Morgan and Revolut, and commissions an annual assessment of banking taxation. The exercise brings together several charges borne by a large bank, including corporation tax, social security contributions, VAT and banking-specific levies. Its approach therefore extends beyond a comparison of headline corporation tax rates.

The organisation’s published research, prepared by PwC, uses a model bank to compare tax burdens across financial centres. Its 2025 international comparison covered London, Amsterdam, Frankfurt, Dublin and New York. Such modelling provides a common framework for examining different tax systems, but the resulting ranking remains dependent on the assumptions and jurisdictions included in that framework.

Paris is central to the campaigners’ objection because leaving out a major competitor limits the reach of any broader claim about London’s position. UK Finance said it could not calculate a comparable Paris figure. That explanation makes comparability itself part of the dispute: expanding the comparison would only strengthen it if the additional calculations were sufficiently consistent with the existing model.

The disagreement also highlights a distinction between a modelled tax burden and the industry’s overall contribution to public finances. UK Finance publishes sector-wide tax contribution estimates alongside its international modelling. Those measures address different questions: how much revenue banking generates, and how the tax treatment of a hypothetical bank compares between selected locations.

For budget policymakers, the immediate issue is how much weight to place on the competitiveness warning. A comparison of tax burdens can inform that judgment, but does not by itself demonstrate what a proposed increase would mean for business activity. Equally, identifying a gap in the comparison does not establish that additional taxation would have no consequences for banks.

The budget will provide the next test of how the government balances the industry’s objections against demands for higher bank taxes. Until any measures are announced, the debate remains about competing arguments rather than a settled policy outcome. The Paris omission leaves a narrower question unresolved: whether the selected-city comparison is broad enough to support the claims made from it.