City investors today welcomed the Chancellor’s decision to stop charging stamp duty on dealing in shares of companies on the junior stock market AIM and other markets designed for small growth companies.
The London Stock Exchange, which runs AIM, said that this was truly good news.
The LSE has long campaigned for the complete abolition of stamp duty on all share trading. But because this is a major source of revenue for the Treasury it has recently, under its chief executive Xavier Rolet, switched its campaign to the smaller AIM market. This provides the Treasury with around £72 million a year with about the same again from other growth markets.
City fund managers were also told that they could expect extra help over tax with the abolition of Schedule 19 stamp duty reserve taxation which has left UK asset managers at a £145 million disadvantage against their European rivals.
But the big banks will see the specific bank levy on their assets raised to 0.142% next year from the 0.13% which the Chancellor announced in his Autumn Statement. He said this was in order to replace income from the banks which they had saved from his lowering of corporation tax.
The levy also has to rise as the banks shrink their balance sheets in order to keep the amount raised around the Chancellor’s target of £2.5 billion a year.
Corporation tax for all companies — large and small — will be reduced further to 20% in 2015.
