JP MORGAN CRITICISES UK BANK SURCHARGE INCREASE

JP Morgan criticised the Labour government’s decision to double the UK bank surcharge to 6% for 15 months. Chancellor John Healey announced the increase in his first Budget to help fund an energy support package. A JP Morgan spokesperson said singling out banking for additional tax “lacks principle” and pointed to competition in the global market. The bank said it remained committed to the UK. Healey said he was grateful for banks’ contribution but wanted them to help fund “breathing space for British families”.

The increase will take effect in January and add three percentage points to the surcharge, which banks pay on top of corporation tax. The Budget expects it to raise an additional £1.5bn. The higher rate will bring the combined tax rate on UK banking profits above £100m to 31%, with a separate balance sheet levy charged on top. Bank shares rose after the announcement; the surcharge had previously stood at 8% in 2023. The Office for Budget Responsibility estimated that banks might shift about £190m in profits overseas in response, while saying the extent of any shift was uncertain.

JP Morgan says it employs about 23,000 people in the UK and serves more than 2.5 million customers through Chase. Its UK operations include hubs in London and Bournemouth. The bank has announced plans for a £3bn tower in Canary Wharf to house its London headquarters. Jamie Dimon had previously said the bank could reconsider the project if the government became “hostile” towards banks, and later said sector-specific taxes have “adverse consequences”. The surcharge increase is due to end in spring 2028.