The boss of Goldman Sachs has urged Rachel Reeves not to increase the financial burden on the banking sector amid industry concerns that it will be targeted for steep tax hikes in next month’s Budget.
Sky News has learnt that David Solomon delivered the warning in a private meeting with the chancellor last week, when he is said to have told her that hitting banks with higher taxes would be damaging to Britain’s wider economic growth prospects.
The meeting came seven weeks ahead of a crucial Budget for the Labour government, which is racing to find ways to plug a fiscal hole estimated at between £20bn and £30bn.
Goldman Sachs disclosed in its latest annual earnings statement that it paid more than $529m of corporation tax in the UK last year.
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It reported nearly $4.3bn of profit on revenues of $10.7bn in Britain in 2024.
The Wall Street giant employs roughly 3,500 people in Britain.
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Because of its size, Goldman is liable to pay the UK Bank Levy, which is effectively a tax on its British balance sheet and liabilities.
It also pays the 3% corporation tax surcharge levied on all banks registering profits of more than £100m.
The surcharge was introduced in 2016 at a rate of 8%, before being cut to 3% seven years later.
Major UK and international banks have been lobbying in recent weeks against a reversal of that reduction.
The banking industry is vulnerable to being hit with additional taxes next month both because of the size of the fiscal challenge facing Ms Reeves and the fact that the sector is generating some of its biggest profits since the 2008 financial crisis.
Mr Solomon’s plea to the chancellor last week is not the first time this year that he has raised the implications of a rising UK tax burden.
In an interview with Sky News presenter Wilfred Frost earlier this year, he said that London’s status as one of the world’s leading financial centres was “fragile”.
“London continues to be an important financial centre, but because of Brexit, because of the way the world’s evolving, the talent that was more centred here is more mobile,” he said in July.
“We as a firm have many more people on the continent.
“Policy matters, incentives matter.”
Mr Solomon added that he had been “encouraged by some of what the current government is talking about in terms of supporting business and trying to support a more growth-oriented agenda”.
“But if you don’t set a policy that keeps talent here, that encourages capital formation here, I think over time you risk that.”
The Treasury did not provide an official readout of last week’s discussion between Ms Reeves and Mr Solomon, but did say in relation to a separate meeting she held with Jamie Dimon, the JP Morgan chairman and chief executive, that he had previously welcomed financial services sector reforms in the UK.
Spokespeople for Goldman Sachs and the Treasury both declined to comment.
