An estimated bill of £300m resulting from the government’s bank profits tax will not affect the Nationwide Building Society’s ability to lend, according to Stuart Williamson, head of corporate media relations.
Nationwide has revealed the estimated impact of the proposed changes to the bank levy and introduction of a tax surcharge on banking companies announced in the July Budget is to increase its net tax cost by £300m over the next five years.
This is equivalent to the capital required to support about £10bn of lending.
However, Mr Williamson said: “That is not to say it will affect our ability to lend. We are a well-capitalised business and an organisation in good health.”
It has been estimated that the changes would remove £20bn of mortgage lending over the next five years because of an additional tax bill of £630m.
In his summer Budget George Osborne announced the introduction of a new tax on banking sector profit from 1 January 2016, set at a permanent rate of 8 per cent.
In July, Yorkshire Building Society chief executive Chris Pilling said the changes would unfairly hit building societies. Yorkshire Building Society expects to pay an additional £13m in tax based on last year’s results.
Adviser View
Kevin Dunn, mortgage adviser with Leicester-based Furnley House, said: “I think it is important to keep the building societies on side because the more competition the better for the consumer.”
