Budget 2017 - PwC comments on today's Budget and the financial services sector - damp squib or thankfully quiet?
Published at 15:06 PM on 08 March 2017
Commenting on today's Budget in relation to the financial services sector, Sarah Prior, financial services tax partner, said:
"Today's Budget has thankfully been a quiet one for the financial services sector - an industry that contributed £71.4bn in the year to 31 March 2016, 11.5 per cent of total UK government tax receipts.
"Banks continue to operate in a very challenging environment from a profitability and regulatory perspective. The bank levy remains a significant cost, and this is now amplified by the bank surcharge. All these factors put a strain on a sector which is of significant importance to the health of the economy and to the businesses, large and small, that operate within it. As banks strive to serve their customers in innovative ways and to support lending to fast-growth businesses, we welcome the changes proposed to the operation of the Research and Development credit system but would urge some clarity on the future taxation of the sector.
"The UK tax system is extremely complex and businesses face an increasing compliance burden, particularly with the introduction of BEPS measures, which seem to go further than might be expected. Against the backdrop of Brexit uncertainty there is an opportunity ahead, and indeed a need, for the Government, as it triggers Article 50, to set a clear direction for taxation of financial services and to address these issues of complexity and compliance burden."
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