On 19 August 2026, Green Party leader Zack Polanski unveiled a proposal for a 38% windfall tax on the domestic profits of Britain's largest banks, arguing the measure would generate funds to ease the tax burden on small and medium-sized enterprises. According to the Green Party's official announcement, the levy would apply to UK profits exceeding £800m and could raise at least £19bn annually. The plan marks the first time the party has attached specific figures to a policy Polanski has floated for months.
The concept originated with the campaign group Positive Money, which had earlier calculated the tax would generate roughly £19bn a year. A more recent analysis by Positive Money, published on 4 August 2026, confirmed that figure could be drawn from Britain's four biggest banks alone this year. The group has said the levy is intended to mirror the UK's existing windfall tax on oil and gas companies, applying only to profits generated directly from the UK public.
When a comparable proposal surfaced last year, the trade body UK Finance countered that banks already contribute through both a corporation tax surcharge and a separate bank levy, suggesting an additional tax would be duplicative.
What would the tax actually target?
Under the Green Party's plan, the levy would be confined to UK retail banking activity rather than a bank's entire global operations. The party's own statement specifies that the tax would apply solely to net interest income and fees earned from domestic retail banking, not to wider international or investment banking business, according to the Green Party's statement.
Polanski said the revenue raised would be redirected to more than a million smaller businesses, cutting up to £10,500 from their National Insurance bills by doubling the Employment Allowance. He framed the policy as essential support for firms he considers the true drivers of local economies.
Small businesses lie at the heart of our communities.
The large banks are cashing in on the backs of the small businesses who are the real innovators and creators, and profiteering from chaos and misery while ordinary people struggle.
Our plans would give a lifeline to more than a million SMEs who will be able to employ more people and add to their communities and our economy in a way that the obscene bonus pay-outs of the big banks do not.
Polanski argued that record profits at Britain's biggest banks stem not from better products or services but from elevated interest rates set by the Bank of England as part of its effort to control inflation.
How has the history of this proposal evolved?
Positive Money first put forward the idea of a bank windfall tax in July 2025, at which point it estimated a more limited version could raise £11.3bn, focused on domestic retail banking profits above £800m. The group revisited and expanded its projections in August 2026 following a fresh round of profit announcements from major banks, arguing the potential revenue had grown substantially since its initial estimate, per Positive Money's updated analysis. Campaigners renewed their push for such a tax on 4 August 2026 after HSBC posted strong results, as reported by a national newspaper's coverage of the reaction. The debate intensified further on 17 August 2026 when JPMorgan chief executive Jamie Dimon reportedly warned the Chancellor against imposing a windfall tax on banks, according to the same publication's report.
How has the government responded?
A Labour Party spokesperson rejected the Greens' framing, insisting the government is already pursuing its own agenda to revive high streets across the country.
Backing small businesses right across the country is a key part of that and, while others talk, that's what Labour is already doing.
The Greens have stood in the way of many of Labour's changes, instead offering unrealistic solutions or unfunded spending pledges.
Meanwhile Labour is cutting business rates for nearly 32,000 small businesses, devolving power to make sure local firms have the workforce they need to thrive, and cutting transport costs to get more customers into our high street shops.
What happens next?
Positive Money has suggested the Autumn Budget could be the decisive moment at which a bank windfall tax is either adopted or shelved, according to its latest press release. With banking executives such as Jamie Dimon already voicing opposition, and the Green Party pressing its own detailed proposal, the issue is likely to remain a point of contention in the run-up to that fiscal event.
Key Facts
- The Green Party's proposed windfall tax would apply a 38% rate to UK bank profits above £800m.
- Positive Money estimates the levy could raise up to £19bn a year from the four largest banks.
- Funds raised would reportedly cut up to £10,500 from National Insurance bills for over a million small and medium-sized businesses via a doubled Employment Allowance.
- UK Finance has previously argued banks already face a corporation tax surcharge and a separate bank levy.
- The Autumn Budget is expected to be a key moment for deciding whether such a tax proceeds.
