UK proposes temporary 6% banking surcharge from January 2027

The Budget proposes legislation in Finance Bill 2026–27, with the surcharge returning to 3% from 1 April 2028. Its rates annex retains the £100 million group allowance during the temporary increase. These are announced legislative changes, not an operative 6% charge today.^[1][2][6]

The existing surcharge is additional to Corporation Tax. Section 269DA of the Corporation Tax Act 2010 currently charges 3% on a banking company’s surcharge profits exceeding its surcharge allowance. The statutory profit calculation adjusts taxable total profits for specified loss, group-relief, transferred-gain and expenditure-credit items; it is not simply a surcharge on accounting profit.^[3]

HMRC’s current explanation covers banking companies and building societies within UK Corporation Tax, with an annual £100 million allowance available at banking-group level or to the relevant standalone company. Groups should therefore check the relevant banking entities, statutory profit computation and allowance allocation before estimating exposure. A UK presence or a financial-services label alone does not establish the charge.^[3][4]

For affected multinational banking groups, the proposal warrants a separate forecast of surcharge costs during the temporary period. It should not be treated as a blanket 31% tax on all UK accounting profits. Detailed transitional and period-allocation calculations should be checked against the eventual legislation, rather than assumed from previous rate changes. The announcements identify no new filing route or payment deadline. Existing surcharge returns, collection and administration follow the Corporation Tax framework explained by HMRC under section 269DL; the proposed rate window is not a replacement compliance deadline.^[1][2][3][5]