THE TUC has renewed its calls for the bank surcharge tax to be increased as British households and firms face the effects of “Trumpflation.”

The bank surcharge is an additional 3 per cent corporation tax on the profits of banking companies exceeding £100 million, which was reduced from 8 per cent in April 2023 by the Conservatives.

With US President Donald Trump’s war on Iran “unleashing economic chaos,” the union body says it is vital that banks play their fair share in taxes.

The call comes as new analysis reveals City bonuses have reached record levels.

In 2025, the average bonus in the finance and insurance sector was £20,300 — a record high.

City bonuses grew 6.3 per cent in 2025, the highest growth for three years, with total bonuses amounting to £23.6 billion — the highest figure on record.

Using HMRC corporation tax receipts, the TUC estimates bank profits were £35.2bn in 2024-25.

The TUC is calling for an increase in the bank surcharge, which it says could raise significant funds given the scale of banks’ current windfalls.

Analysis reveals an increase could raise between £23bn and £55bn over the next four years, with a reversal of the Tory cuts to 8 per cent — the “bare minimum” — raising £9bn.

The TUC is also calling for the government to reinstate the cap on banker bonuses to curb excessive pay while the rest of the country struggles with the cost-of-living crisis.

TUC general secretary Paul Nowak said: “Donald Trump’s illegal war abroad risks unleashing economic chaos at home.

“It’s absolutely right that the government does everything it can to protect British households and firms from Trumpflation.

“The longer this war goes on, the more likely the government will need to step in with increased support.

“That’s why it’s now more vital than ever that banks pay their fair share in tax.”

Mr Nowak said that the Tory bank surcharge slash created a “profits bonanza for banks,” saying: “If rates remain higher for longer, banks are set to cash in even more.

“Instead of lining their own pockets with eye-watering bonuses, it’s only right that banks’ bumper profits are taxed fairly to invest in our hospitals, schools and local councils.”