LONDON (ShareCast) - (ShareCast News) - Challenger banks have reportedly requested an extension to the government's flagship industry funding scheme during a meeting at which they expressed their anger over Chancellor George Osborne's plans for an 8% Corporate Tax surcharge on profits of more than £25m.
According to Sky News, a group of banks bosses who met with senior Treasury officials on Friday asked that the Funding for Lending Scheme be extended past its expiry date next January.

Sky cited a source who attended the meeting as saying the banks urged that any extensions of the FLS should be reserved for lenders with balance sheets of less than £20bn, which were expanding their net lending to small business.

According to Sky's source, the Treasury said it would consider the proposal.

Aldermore, Close Brothers, Metro Bank, OneSavingsBank, Paragon Bank, Secure Trust Bank, Shawbrook and Tesco Bank were said to be among those represented at the meeting.

Sky reported that the Treasury was resistant to the idea of a blanket increase in the £25m threshold, but more receptive to a proposal for 'staircasing' the impact of the tax depending on the size of banks' balance sheets.

The banks were also said to have suggested that a working group should be formed to discuss ways in which the tax surcharge could be mitigated.

On Monday, research by accountants EY revealed the banking sector will have to pay out significantly more than expected from Osborne's new profits surcharge.

When the Chancellor unveiled the new tax, the Treasury forecast there would be a £1.66bn net tax gain over the five years of the current parliament. But research by accountants EY suggested this calculation is likely to be "vastly understated" and that the new surcharge could "easily" take double the predicted takings.

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