What changed?
The Bank Corporation Tax Surcharge rate is 3%, applied within the existing bank corporation tax framework.
Finance Bill 2026–27 will temporarily increase the surcharge to 6% from 1 January 2027 through 31 March 2028, returning to 3% on 1 April 2028.
Practical consequence: Banks should model the 15-month higher-rate period across accounting periods and update forecasts when the legislation is enacted.
What happened?
The UK government announced a temporary increase in the Bank Corporation Tax Surcharge as part of Budget 2026. The surcharge rate is planned to rise from 3% to 6%.
Key details
The 6% rate is the surcharge, not the total corporation tax rate. It applies alongside the ordinary corporation tax framework and is intended to help fund household support measures. Detailed implementation will be contained in Finance Bill 2026–27.
Who is affected?
Banks with UK taxable profits within the surcharge rules are directly affected. Banking groups, investors, finance teams and auditors should assess the rate change across relevant accounting periods.
Effective date / timing
The higher rate is planned for 15 months from 1 January 2027 through 31 March 2028. The rate is due to return to 3% from 1 April 2028. The measure was announced on 28 October 2026 and is not yet enacted.
Why it matters
A temporary rate change can alter current and deferred tax calculations, earnings forecasts and comparisons between financial periods even though it expires after 15 months.