The UK’s 2026 Budget doubles the corporation tax surcharge on banks while expanding an export finance lending limit and temporarily suspending selected import tariffs, according to Trade Finance Global. The outlet reported that Chancellor John Healey announced the measures on 29 October, with much of the wider trade support package building on initiatives unveiled earlier in the year.
Banks will face an additional three percentage points of surcharge for 15 months, taking their corporation tax rate, including the existing surcharge, to 31%. The standard corporation tax rate remains unchanged at 25%. Trade Finance Global reported that bank shares rose after the increase proved smaller than many had feared. UK Finance nevertheless warned about international tax competitiveness, with chief executive David Postings stressing the importance of keeping the increase temporary.
For exporters, the General Export Facility’s automatic lending limit will rise from £10 million to £15 million. This allows participating lenders to provide larger facilities without seeking transaction-specific approval from UK Export Finance. Eligibility will also widen, while approvals for larger facilities will be accelerated, with the aim of helping businesses finance investment and fulfil overseas orders.
The changes sit alongside a previously announced guarantee from UK Export Finance and the British Business Bank, intended to broaden access to funding for exporting small and medium-sized enterprises. Trade Finance Global said that scheme was due to launch the following spring. A separate Flexible Finance pilot, introduced the previous month, targets up to £5 billion in guarantees covering as much as 80% of eligible commercial loans to encourage overseas purchases of British goods.
On import costs, the government has temporarily suspended tariffs on fertiliser, kerosene heating oil and more than 100 food and drink products. The measures offer relief to agriculture and households dependent on heating oil, which falls outside Ofgem’s energy price cap. Food products covered include avocados, couscous, green tea and tomato ketchup, the outlet reported.
Freight operators will also retain fuel duty relief. The Budget keeps the rate at 52.95p a litre, extending the temporary 5p reduction until 1 July 2027. A 3.7p reduction in red diesel duty will continue for another six months to the same date, benefiting rail freight. These measures accompany a previously announced 12-month vehicle excise duty holiday for most heavy goods vehicles.