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Reinstate windfall tax on banks after surge in profits, TUC urges
TL;DR
The TUC calls for an increased windfall tax on the UK's largest banks after they reported nearly £14bn in first-quarter profits, driven by market turbulence from the Iran war. The current bank surcharge was reduced from 8% to 3% earlier this year.
Key points
- TUC calls for increased windfall tax on banks
- UK's big four banks reported £13.8bn in profits
- Current bank surcharge reduced from 8% to 3% in 2023
- Profits partly driven by market turbulence from the Iran war
- High interest rates benefiting banks
Mentioned in this story
Trades Union CongressBarclaysHSBCLloydsNatWest
An increased windfall tax should be imposed on the UK’s largest banks according to trade union leaders, after the big four lenders reported almost £14bn in first-quarter profits, partly fuelled by market turbulence caused by the Iran war.
The Trades Union Congress (TUC) renewed its call for an increase in the current bank surcharge, which was reduced from 8% to 3% of profits above £100m by the Conservative government in 2023, as banks benefit from the high interest rate environment.
The Bank of England held interest rates at 3.75% last week, with markets pricing in up to two increases by the end of this year. The average two-year fixed mortgage rate was 5.77% on Tuesday according to Moneyfacts, compared with 4.83% before the start of the conflict in the Middle East.
Over the past week, the UK’s big four banks – Barclays, HSBC, Lloyds and NatWest – reported combined profits of £13.8bn for the first quarter.
“Getting banks to pay more tax on their profits is plain common sense when they’re raking in billions and the rest of the country is struggling to get by,” said Paul Nowak, general secretary of the TUC.
“With Donald Trump’s war abroad unleashing economic chaos at home, it’s only right that banks’ bumper profits are taxed fairly and used to shield households and firms from the damaging impacts of the war.”
The big four high street banks – Barclays, HSBC, Lloyds and NatWest – made a combined £13.8bn in profits in the first quarter of 2026. Photograph: Andrzej Rostek/Alamy
Q&A
What is the current windfall tax rate on UK banks?
The current windfall tax rate on UK banks is 3% on profits above £100 million.
How much profit did the UK's big four banks report in the first quarter?
The UK's big four banks reported combined profits of £13.8 billion for the first quarter.
Why are trade union leaders urging for a windfall tax increase?
Trade union leaders are urging for a windfall tax increase because banks are profiting significantly amid economic struggles faced by the public.
