Chancellor sends muted message to the City that he has its back

Partner and Head of Financial Services Karim Haji comments on the budget

Partner and Head of Financial Services Karim Haji comments on the budget

Commenting on today’s Budget, Karim Haji, EMA and UK Head of Financial Services, KPMG, said:

“The Chancellor sent a muted message to the City that he has its back whilst also protecting the Treasury’s purse. Whilst banks might be reassured that their overall tax bill remains largely stable, there will be some disappointment at the lack of broader simplifications and the fact the sector still faces multiple sector-specific tax regimes. Challenger banks will be relieved by the shelter provided by increasing the annual allowance for the surcharge to £100m mitigating the potential impact of the tax rises for this group.

“The Chancellor spoke several times about making the most of the UK’s departure from the EU but there was little that reinforced the need to ensure UK financial services maintains its crown as a global leader. Investment in sustainable finance, fintech and upskilling staff are all essential to achieving that and I hope we see a real focus on this in the coming months and years.

“On the face of it, the move to extend R&D tax relief to cloud computing and data costs will be met with a sigh of relief by UK banks straining under the pace and scale of their technology transformation. However, the actual benefits this affords could be limited and will depend on the detail around what's considered R&D and where activities are located. If you follow IFRS accounting rules, not much investment into cloud software is considered R&D.”




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Gerard Swinley



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KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 16,000 partners and staff. The UK firm recorded a revenue of £2.3 billion in the year ended 30 September 2020.

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