Budget: Banking sector hit for £2bn a year

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The bank levy will come into force next January and will help the sector to play its part in shrinking the UK's deficit after being bailed out with taxpayer cash during the financial crisis.

George Osborne's plans will force banks to pay a tax based on their net worth – seen more as a tax on risk, rather than profits.

The tax comes as part of a joint move by the UK, France and Germany, with Britain's European counterparts also announcing levies on bank balance sheets.

Similar plans are also going through the United States Senate, although Mr Osborne said the UK would continue working with the G20 nations to develop a wider international bank levy.

The bank levy will be charged at a lower rate of 0.04 per cent in the first year – generating an expected 1.15bn, rising to 0.07 per cent or 2.3bn in 2012/13 and up to 2.5bn in 2013/14.

But the British Bankers' Association warned the tax could make the UK banking sector less competitive.

The Building Societies Association said it was pleased the levy is not a tax on retail deposits and welcomed the fact the Chancellor has exempted smaller deposit takers from the levy.

A BSA spokesman added: "We understand the banking levy will affect only the very largest of our members.

"We do not know exactly which societies and mutual deposit takers it will affect as yet – this will depend on the detail and complexity of their balance sheet."

A Leeds Building Society spokesman he did not believe the society would be affected by the levy because its assets on December 31 2009 were 9.5bn, below the 20bn asset threshold.

A Skipton Building Society spokesman said: "Initial indications are that the new levy won't affect Skipton."