Britons with money hidden in secret bank accounts in Switzerland will, reportedly, be subject to a 50% withholding tax collected by the Swiss authorities on behalf of the UK government under a ground-breaking new deal
Britons with money hidden in secret bank accounts in Switzerland will, reportedly, be subject to a 50% withholding tax collected by the Swiss authorities on behalf of the UK government under a ground-breaking new deal. Experts at top 20 accountancy firm Saffery Champness highlight that although the deal is a huge step forward in the campaign against tax evasion, it leaves a number of questions unanswered and could be interpreted as a concession to tax evaders.
Ronnie Ludwig, partner in the private wealth group at Saffery Champness comments:
“This is a huge step forward in the Treasury’s bid to tax overseas accounts but the new deal with Switzerland is likely to open up some interesting questions too.
“Firstly, it drives a coach and horses through the Liechtenstein Disclosure Facility negotiated two years ago, which offers reduced penalties for those who come forward with undeclared accounts in Liechtenstein. However, people who were planning to come forward under the amnesty, might now prefer not to do so and, instead, see if the Swiss tax deal offers them a better option.
“Moreover, the Swiss agreement can be seen as a very real concession to tax evaders. It means some tax revenues from secret accounts will flow into Treasury coffers but the fact remains that only a small proportion of the total tax that would have been due on the money stashed away in secret accounts in Switzerland over the years can be recovered under these latest proposals.
“The Swiss agreement is a pragmatic move by the UK Treasury that will certainly help bring an immediate boost to tax revenues but it is a quick fix measure. Some might argue it is just a way of papering over the cracks in a severely under-resourced HMRC. The department is under significant pressure and might simply not have the manpower and resources to initiate and execute full-scale investigations of every potential tax evader to ensure that every penny due is paid over to the public purse.”