SHOULD the UK press ahead with plans for its own bank levy, it could have serious consequences for Guernsey’s finance sector, it has been claimed.

Ernst & Young tax partner Graham Parrott (pictured) said he believed the strength of the island as a finance centre was heavily linked to a prosperous City of London and if that were to be hampered by a future tax on banks, Guernsey could suffer.

UK Chancellor George Osborne is expected to outline the details for a levy on UK-based banks in his first budget on 22 June, after a meeting of G20 finance ministers at the weekend near-enough shelved plans for a worldwide banking tax.

The proposals had come under severe criticism from countries including Canada and Australia, who did not need to bail out their own banks during the financial crisis and so saw no need for a levy to help pay for future bail-outs.