FREE: Taxpayers struggling to account for UK bank levy
UK taxpayers are experiencing a number of headaches when it comes to complying with the new bank levy, says a taxpayer at a large multinational bank.
Speaking to International Tax Review, the taxpayer, who wished to remain anonymous, flagged up the problem banks were experiencing when accounting for the levy. The main issue is that the levy applies to the global consolidated balance sheets of British banking groups and building societies, while not all the necessary information is held in the UK. This has required a lot of coordination between the bank’s branches and subsidiaries.
Another problem the taxpayer identified is that they were facing double taxation with the German bank levy.
The German levy, like the UK's, is based on liabilities, but Germany's is payable into a fund and is only levied at an entity level, excluding German branches of foreign banks. The UK's levy, by contrast, includes all banks which operate in the UK including their branches and subsidiaries based in Germany.
"Double taxation will result from the overlap of domestic measures whose scope of application has not been concerted," says Roger Kaiser, senior tax and accounting adviser at the European Banking Federation.
The taxpayer was hopeful, however, that an agreement between the UK and Germany will be reached soon to prevent them being taxed twice on the same assets and liabilities.