Tax rise or tax cut?

Labour claim that even after today's announcement of a tax rise on the banks that the Treasury will be raising less from the banks than they were last year.

They even quote the Treasury's own figures to make their point. The levy, they say, will bring in �1.9bn in 2011/12 compared to �3.5bn in 2010/11 from the bonus tax.

The Treasury has two responses to that:

First, they say that the �3.5bn figure takes no account of the loss of corporation tax and income tax. The net figure, they say, is �2.3bn.

Secondly, they say that since, unlike most businesses, banks' balance sheets apply to a calendar year - not April to April - the chancellor's �2.5bn applies to the year 2011.

Source: http://www.bbc.co.uk/blogs/nickrobinson/2011/02/tax_rise_or_tax.html

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