The UK Treasury today came under fire after increasing its levy on banks' balance sheets in a move tax accountants warned would make it harder for banks to budget, raise equity capital and was likely to hit lending to smaller businesses.

The financial sector will have to pay an extra £800m in taxes after the government unexpectedly increased the bank levy today. It had planned to spread the increase over time because of uncertain market conditions, but the government deemed the sector had recovered enough that this was no longer necessary.