HMRC grappling with impact of UK bank levy on clearing

HM Revenue & Customs "does not wish to discourage" client clearing business, which is caught by UK balance sheet tax

The UK's tax authorities are trying to avoid a policy clash between the country's new bank balance sheet levy and the shift to central clearing for over-the-counter derivatives. Banks fear the tax will make it harder for their clearing businesses to compete by increasing their tax bill when clients post cash collateral – and those concerns are being considered by HM Revenue & Customs (HMRC) as part of an ongoing review of the levy.

"Where banks act as a clearing member – essentially a middleman