International bank leaders have warned that any further increase in taxes on the sector could lead them to shift future investment away from the UK, adding to concerns over London’s standing as a financial centre.
The message was delivered to Andy Burnham’s government amid growing unease in the industry over the possibility of a windfall tax in next month’s Budget.
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John Healey, the chancellor, is seeking extra revenue as higher borrowing costs linked to the Iran war weigh on the public finances.
A survey by UK Finance, the banking industry’s main lobby group, found that major lenders from the US, EU, Asia, Africa and the Middle East no longer view Britain as their default European base in the way many did before Brexit.
“I think already we’re very highly taxed,” David Postings, chief executive of bank lobby group UK Finance, told the Financial Times (FT).
“To go further than that, really I think would reach a tipping point and would be very risky on the part of the government.”
According to bankers surveyed, two developments would force a more serious review of their UK operations: a heavier tax and regulatory burden, and tighter immigration rules that make it more difficult to relocate staff to Britain.
The debate comes as bank earnings remain strong.
NatWest, Lloyds Bank, and the UK divisions of Barclays and HSBC reported combined pre-tax profits of £13bn ($17.1bn) in the first six months of 2026, up 16% from a year earlier.
Trade union leaders argued the sector could absorb a higher tax bill.
Paul Nowak, general secretary of the Trades Union Congress, said there was “a mountain of evidence” that banks could afford to pay more, “not least the record £25bn bonus pool they paid out last year”.
Jamie Dimon, chief executive of JPMorgan, has already spoken against higher taxes on UK banks, saying they could have “adverse consequences” for both the industry and the wider economy. His comments were seen as a warning over the group’s planned £3bn London office project.
If ministers reverse the cut made three years ago to the corporation tax surcharge on banks, the overall tax rate faced by lenders in London would rise above 50% for the first time.
“While international banks continue to value the UK’s deep capital markets, world-class talent pool, legal certainty, optimal timezone, regulatory expertise and global connectivity, these core strengths are facing unprecedented pressure,” said the UK Finance report seen by the FT.
The report was based on discussions with executives at 14 international banks employing 35,000 people in the UK. It said: “The accumulation of individually manageable pressures has, over time, weakened the case for locating additional activity in the UK.”
Respondents also said Britain risked “falling behind” rival countries in artificial intelligence.
“It is not about anyone saying they will shut down in London,” said Jonathan Herbst, global head of financial services at law firm Norton Rose Fulbright, which carried out the survey. “It is more about decisions on where to invest and where to grow. I would say the jury is out.”
Among the issues raised by executives were tax levels, Brexit, regulatory divergence, rising expenses, barriers to moving employees, slow policy decisions and expensive legal setbacks, including the recent car finance scandal.
