Banks hit with extra £4bn tax bill

The amount of profit in UK banks that can be offset by losses carried forward will be limited to 50%, and relief on bad debts will be delayed, the Chancellor has announced.

The move means banks should contribute almost £4bn more in tax over the next five years, George Osborne said in today's Autumn Statement. Some banks are currently offsetting losses incurred during the financial crisis against future profits, a process which could otherwise continue for 15 years, he added. Bank stocks dropped on the announcement, but by mid-afternoon shares in the likes of RBS had recovered - the government-controlled bank was flat at 394.9p, having previously been 0.7% higher on the day.