On 8 November 2023, HM Treasury (HMT) published a consultation on draft regulations to implement the Bank of England (BoE) levy. In parallel, the BoE published a consultation on its proposed Levy Framework Document.
The Government confirmed in June 2022 its intention to proceed with a levy-based arrangement to replace the Cash Ratio Deposit (CRD) scheme. Doing so is intended to ensure that the income received by the BoE is in line with its forecast expenditure, provide increased certainty to the BoE on its overall funding and increased certainty to deposit-takers over the size of their annual contributions.
HMT’s consultation sets out draft legislation specifying which institutions are required to pay the levy and how the levy is apportioned. It asks for stakeholders’ views on the drafting of that legislation. It should be read in parallel with the BoE’s consultation.
The BoE consultation includes a copy of the proposed Framework Document for the BoE levy, which explains how the annual levy will be charged and how it will operate. The levy is intended to replace the CRD scheme on 1 March 2024, although the exact timing for commencement of the levy will be decided after responses to the consultation have been received and considered, and will then be subject to Parliamentary approval of HMT’s draft regulations.
The deadline for feedback to both consultations is 15 December 2023.