But the tax increase will only be temporary, lasting 15 months, Finance Minister John Healey promises in a speech to Parliament.
The money raised by the bank tax will go towards support measures to help British households cope with high energy prices, according to the proposal.
Other proposals in the budget include increases to the minimum wage and gambling taxes, while temporary support measures such as reduced VAT on electricity will be extended.
On the London Stock Exchange, British bank shares are rising after confirmation that the bank tax increase will only be temporary. British interest rates and the pound are little changed.
The growth forecast for the British economy is raised to 1.2 percent this year in the budget, from 1.1 percent previously. But for next year, the forecast is lowered to 1.0 percent, down from a previous forecast of 1.6 percent.
