Britain's banks will pay nearly £40 billion in extra taxes after being hit by levies under Chancellor George Osborne, according to industry research.

The figures by banking lobby group the British Bankers' Association (BBA) show that the sector will pay out £39.4 billion in levies between 2010/11 and 2020/21 - in addition to other company charges such as business rates and corporation tax.

The BBA is calling on the Government to review UK bank taxes to ensure the industry remains competitive.

The survey comes after the Chancellor in last week's summer Budget moved to cut the current bank levy over the next six years, while hitting the sector with a new 8% surcharge on profits.

The new surcharge will take effect from January 1 next year and will see banks pay an extra £2 billion in taxes over the next five years.

The Government added that from January 2021, the bank levy will only be charged on the UK balance sheets of lenders based in the UK, not on their worldwide operations.

But the move angered the BBA, which said this is the fifth new tax on banks the Chancellor has introduced in as many years.

BBA chief executive Anthony Browne said: "Banks expect to pay their fair share of tax. But they are concerned that they are being singled out for new punitive taxes every year.

"This makes it harder for banks - the UK's biggest export industry - to lend to businesses and create new jobs."

The BBA said over the last five years the Chancellor has introduced the bank levy, a bonus tax and changes to restrict the amount of bank profits that can be offset by carried-forward losses.

The summer Budget also approved rules to restrict bank customer compensation expenses against corporation tax, as well as the new 8% bank surcharge on profits.

The BBA said the bank levy was paid by 30 banks, but the new surcharge will be levied on hundreds of banks and building societies.

Mr Browne said: "The new bank corporation tax surcharge will undermine competition by creating an additional new tax for lots of smaller banks."

He added: "Banking is one of the most globally mobile businesses, that is why we would like the UK Government to hold a strategic review of bank taxation to ensure we remain competitive."

The BBA pointed out that over the 10-year period the bank levy will bear the heaviest burden on the industry, accounting for £25 billion of extra tax.

UK banks have been under the spotlight since the financial crisis in 2008, when the Government bailed out two high street banks, the Royal Bank of Scotland (RBS) and Lloyds Banking Group, at a cost of £45 billion and £20 billion respectively.

The Government still holds a 78% stake in RBS, and just under a 16% holding in Lloyds.

ends