Barclays increases bonus pool by nearly 30% as calls grow for UK bank tax
Barclays has increased its banker bonus pool by nearly 30% to £1.3bn for the first half of the year, following a sharp rise in profits that has intensified calls for the government to impose higher taxes on UK banks. The bank's strong results have been seized upon by the Trades Union Congress (TUC), which argues that Barclays can easily afford to contribute more to help fund policies aimed at easing the cost of living crisis, putting pressure on the new prime minister and chancellor to act.
Corporate filings released on Tuesday showed the bonus pot, covering annual and deferred payouts, rose from £1bn last year, and is expected to grow further before final pay decisions are made by the end of February 2027. The increase came after Barclays reported second-quarter pre-tax profits of £3.3bn, up 31% year-on-year, taking half-year profits to £6.1bn, a 17% rise; the bank also announced a £1bn share buyback and £800m in dividends. TUC general secretary Paul Nowak said such "bonanza" profits showed banks could afford higher taxes and urged ministers to raise the bank surcharge to help reduce energy bills.
- Barclays raised its bonus pool to £1.3bn, up nearly 30%
- Profits jumped, with £1bn buyback and £800m dividends announced
- TUC urges higher bank tax to fund cost-of-living support
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Advocates of a windfall or additional bank tax argue that when a lender can raise its bonus pool by nearly 30% on the back of £3.3bn quarterly profits, it clearly has capacity to contribute more to the public purse without threatening its viability. They point out that banks benefited substantially from higher interest rates set by the Bank of England, a structural windfall rather than the fruit of exceptional risk-taking or innovation, and argue it is fair that some of this be redirected towards pressing public needs, such as funding social care reforms. For those holding this view, taxing bumper profits reflects a basic principle of shared sacrifice and progressive taxation when household budgets remain squeezed.
The case against
Those opposed to a further bank tax argue that UK lenders already face a heavier tax burden than most other sectors, through corporation tax surcharges and the bank levy, and that repeatedly singling out banks risks undermining London's competitiveness as a financial centre. They contend that bonus decisions reflect competitive global labour markets for talent and are governed by existing remuneration rules, not evidence of untaxed excess, and that strong profits also support lending capacity, shareholder pensions and dividends held by ordinary savers. From this perspective, stable and predictable tax policy is essential to encourage continued investment and job creation in the UK financial sector, and ad hoc tax raids in response to a single strong quarter could deter that investment.