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George Osborne tells UK banks "Pay Your Taxes"
British Chancellor of the Exchequer George Osborne will no longer allow banks to write the cost of penalties for market abuse or mis-selling down against tax, a move which will raise over £5 billion in tax revenue by 2020
British Chancellor of the Exchequer George Osborne has adopted a policy by stating that he intends to close the loophole that allows banks to use compensation to reduce their tax bills.
The Chancellor has announced that British banks will no longer be allowed to offset costs incurred by paying compensation for mis-selling and market abuse against their tax bills, with the resultant gain in taxation estimated to raise £4.4 billion over the next five years and £5.3 billion by 2020.
On first glance, this appears to be a left-leaning ideology, in which banks will have their corporation tax raised substantially, however it does have conservative undertones in that the taxation rates which banks will pay remain unchanged, and that penalties should be deterrants and not items to be written down as expenses for offsetting against tax liability.