The UK government has hit banks with a surprise levy hike that will cost them £1.2bn over five years amid a crackdown on the sector that will also cost staff exploiting tax loopholes hundreds of millions of pounds.

In a Budget that provided a shot in the arm to UK businesses and to the UK as a destination for business, Chancellor George Osborne was resolute in his plan to impose greater tax burdens on the banking sector to ensure it did not simply benefit from an improved corporation tax regime over the next five years.