All six Cornish MPs have voted on an amendment that would have seen a proposed reduction to a surcharge on bank profits halted.

Cornwall's MPs voted on an amendment to the Finance Bill, currently making its way through parliament, that would have seen a halt to the cut of the surcharge levied on banking profits over £25 million from eight per cent to three per cent.

Derek Thomas, Sheryl Murray, Steve Double, Cherilyn Mackrory, Scott Mann, and George Eustice all voted no on the amendment when the vote was held last week (Feb 2).

The proposed reduction of the profits surcharge has been explained as coming at a time when the rate of corporation tax is also being raised from 19 per cent to 25 per cent.

Usually, banks pay 27 per cent on their profits - 19 per cent corporation tax and the eight per cent surcharge.

However, with the rate of corporation tax being raised in 2023, the government has claimed it wants to keep British banks competitive and is reducing the surcharge so that, once corporation tax does rise in 2023, the tax rate banks will pay is around 28 per cent, instead of the 33 per cent it would have risen to without the five per cent surcharge cut.

Critics of the proposal have previously said that the money raised by the surcharge could be put towards helping protect people from rising energy costs expected from April.

The Packet contacted the offices of all six Cornwall MPs but received responses from only two.

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A spokesperson for the office of Scott Mann MP said: "The government is raising the rate of all corporation tax from 19% to 25% to help pay for the consequences of the Covid-19 pandemic – things like business grants, extra NHS spending, and the furlough scheme.

"However, when combined with the banking surcharge, this would mean banks paying about 33% in tax.

"This would be higher than in Germany (32%), France (29%) or New York (26%).

"This would make banks based in the UK less competitive, and risks encouraging themselves to base overseas – meaning we risk them paying little or no tax at all.

"To stop this, the banking surcharge is being lowered from 8% to 3%.

"However, this still means that the overall rate of corporation tax on banks will actually increase from 27% to 28%, not fall, and it means that our banks still pay more tax than they would in the U.S. and other countries.

"The government is also retaining other bank-specific taxes and interventions, including a Bank Levy, which means that banks will continue paying a higher rate of corporation tax than other businesses."

A spokesperson for the office of George Eustice MP said: "As the Chancellor said when he introduced this change, although the surcharge has been reduced, the rate of corporation tax that banks will pay is going up from 27% to 28% while the rest of the UK corporate base will pay 25%."