UK banks brace for ‘windfall tax’ to help plug £40bn hole in public finances

No commitment yet to cut banking surcharge after corporation tax U-turn, with sector facing headline tax rate of 33%

UK banks are steeling themselves for a windfall tax by stealth as the new chancellor tries to plug a 40bn hole in the public finances.

City lobbyists at UK Finance are concerned that banks will not be compensated for Jeremy Hunt's U-turn on corporation tax, which will now mean the levy rises from 19% to 25% next year.