Revolut and banking rivals urge Healey to raise tax surcharge threshold in budget

Revolut, Britain's most valuable fintech, is among a pack of challenger banks urging the chancellor to remove the threat of an immediate tax raid on the sector in his budget next month.

Sky News has learnt that a dozen of Britain's most significant lenders to consumers and businesses have signed a letter to John Healey calling on him to lift the threshold at which the surcharge kicks in from £100m to £500m.

The signatories, which also include Monzo, Paragon Bank and Shawbrook, were prompted to lobby Mr Healey amid speculation that he plans to target the banking sector in his inaugural Budget in just over four weeks' time.

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Unions and other campaigners have been calling on the chancellor to raise billions of pounds from the industry to fund tax cuts elsewhere, amid a period of bumper profits for the UK's biggest banks.

In their letter, a copy of which has been seen by Sky News, the challengers said "any increase in the rate of the surcharge would have a significantly negative and disproportionate impact on mid-tier and specialist banks and harm investor sentiment in our sector".

"We therefore ask that the current bank tax surcharge allowance be increased from £100m to £500m of Surcharge profits to ensure that we can continue to support SMEs and individuals across the UK, support the government's growth agenda, and to provide some protection to mid-tier and specialist banks as they scale.

"Based on our analysis, the cost of this change to the Exchequer from mid-tier and specialist banks would only be £39m but surcharge tax revenues would still be significantly above 2025 levels under all scenarios."

The letter has been signed by bank bosses including Francesca Carlesi, the chief executive of Revolut's UK operations, Monzo chief executive Diana Layfield, Paragon chief executive Nigel Terrington and Marcelino Castrillo, who runs Shawbrook.

Executives from Aldermore, Close Brothers, Handelsbanken, HTB, Investec, Oaknorth, One Savings Bank and United Trust Bank also signed it.

In their letter, the group told Mr Healey that the signatories accounted for 60% of UK lending to SMEs, and argued that the motive for introducing the Bank Surcharge after the financial crisis was primarily aimed at lenders which had required taxpayer support.

"Many mid-tier and specialist banks did not play a role in the [Global Financial Crisis], did not require bailing out and the majority did not even exist at that point," they said.

In addition to the request to lift fivefold the threshold at which the surcharge kicks in, the challenger banks urged that the allowance be reviewed regularly "to avoid it becoming a 'cliff edge' that disincentivises growth".

The challenger banks' letter adds to the pressure on Mr Healey not to raise taxes on the industry in his maiden fiscal statement.

Jamie Dimon, the chairman and chief executive of JPMorgan Chase, a major UK employer, has met and spoken to Mr Healey in recent weeks, with the threat of cancelling a major new UK headquarters reportedly dangled over the Treasury amid the prospect of a tax raid on international banks.

UK Finance, the trade association, has also written to Mr Healey to warn that imposing further tax rises on the banking sector would risk "damaging the UK's international competitiveness".

Bank lobbying against tax hikes has become a well-trodden path for executives in recent years as higher interest rates and declining provisions for misconduct have helped fuel industry profits

Britain has retained a number of bank-specific taxes - including the bank levy and surcharge - since the aftermath of the 2008 financial crisis which the sector has argued makes the country less competitive than those based in rival financial centres around the world.

Unlike other countries, the UK also retains a ring-fencing regime separating retail and investment banks which imposes significant costs on the big five lenders.

Under Rachel Reeves, Mr Healey's predecessor, the Treasury began to reform ring-fencing rules, although the new chancellor has yet to express a view about whether that overhaul will proceed.

None of the signatories contacted by Sky News would comment on Monday.

(c) Sky News 2026: Revolut and banking rivals urge Healey to raise tax surcharge threshold in budget