Budget analysis – Banking

Speed Read: The banking sector remains the focus of considerable government scrutiny. The Budget contained few surprises but it provided some welcome clarifications to the taxation of foreign profits, and welcome news that the Government is bringing forward a review of foreign branch taxation, alongside the review of the CFC rules. As always there was a considerable amount of anti-avoidance legislation, much of which had already been announced. 'Principles based legislation' continues to be popular with HMRC, who will consult on an extension of this concept to intra group transactions. The disclosure regime is to be extended and the promised further consultation on the details is very much to be welcomed. There were no new announcements on employee tax related matters, and the tax costs of employing staff in London will continue to be an area of concern for the banking sector.