UPDATE 1-Britain to lower banks profit surcharge to 3% from April 2023

(Adds more detail)

LONDON, Oct 27 (Reuters) - Britain will lower its surcharge
on banking profits from April 2023, the finance ministry said on
Wednesday, as the government seeks to shore up London's
competitiveness as a global financial centre after Brexit.

British Finance Minister Rishi Sunak said in his budget
statement that the current 8% surcharge on profits over 25
million pounds at banks will be cut to 3% from April 2023,
softening the impact of a rise in UK corporation tax on that
date from 19% to 25%.

"The overall rate of corporation tax on banks will in 2023
increase from 27% to 28%, and will remain higher than the rates
paid by other companies," Sunak told parliament.

Britain is looking for ways to maintain London's role as a
global financial centre after being largely cut off from the
European Union since Brexit. Without a cut in the surcharge, UK
lenders' overall tax bill would put them at a disadvantage to
their international peers.

"Small challenger banks are improving banking competition
which is good for the sector and good for consumers, so to help
them I will also raise the annual allowance to 100 million
pounds," Sunak said in reference to the current 25 million pound
threshold.

(Reporting by Huw Jones, Editing by Hugh Lawson and Mark
Porter)