Swiss Bank Secrecy: going, going, Gone?

The UK has done a deal with the Swiss government that tears up the rulebook on the fabled Swiss banking secrecy. From 2013 UK taxman will collect tax from Swiss bank accounts held by UK residents: and, just as crucially, get complete access to all Swiss bank details of selected UK citizens.

HMRC’s chief tax inspector has brokered a deal that rings closing time on Switzerland as a haven for tax dodgers.  From 2013 anyone in Britain with a Swiss bank account will face:

  • Having to allow the bank to reveal the details of the account to HMRC, and then (if HMRC decided not to prosecute) having to fully disclose all tax irregularities for up to 20 years, and then pay penalties (up to 200% of the tax), and interest; or
  • Having the full balance of the account taxed at between 19 to 34%: dependent on the size of the deposit, the age of the accounts and previous withdrawals.
  • Whichever of those two routes is taken then also, from 2013 onwards, a “Withholding Tax” will apply: at 48% on all interest, 40% on dividends, and 27% or capital gains.
  • If the disclosure route is not taken, and HMRC subsequently investigate, it seems unlikely that any credit will be given for the 34% “Balance Levy”, or for any Withholding Tax (as that is not covered by the UK-Swiss Double Taxation Agreement).
  • The taxman will give the Swiss 500 names of British residents each year, and the Swiss will provide full details of any accounts, including income and balance transfers, to HMRC. No consent of the account holder is required.
  • Information provided by Switzerland is likely to lead to a significant number of criminal prosecutions.
  • HMRC are actively pursuing similar deals with other tax havens in order to close down any boltholes. They have signed 20 Tax Information Exchange Agreements with tax haven countries in the last year alone.

What does it mean for me?
If you have a Swiss bank account you need to urgently consider your options now.  If you do nothing: in 2013 34% of the balance will disappear.  Thereafter 48% of all income will be deducted.  You could still be investigated.  You may not get any credit for the levies deducted by the Swiss.  You could be prosecuted, go to jail and have your assets confiscated. Instead of suffering a 34% levy you could allow the Swiss bank to reveal your details to HMRC.  Again this would risk prosecution. If HMRC decides to carry out a civil investigation of fraud you could face paying tax going back 20 years, plus interest for the whole period, plus penalties of up to 200% of the tax.

Is there a better way to regularise my tax affairs?
Yes.  HMRC are offering a tax amnesty for Swiss bank account holders, whereby you only pay tax back to the tax year 2000 with a fairly token 10% penalty.

How can Lynam Tax Enquiry Experts help me?
Our Tax Disclosure specialists have years of experience of tax investigations and disclosures involving offshore bank accounts. We can assess your particular situation and advise you of the optimum route.  We can manage your disclosure, and guide you to a successful outcome – as we have done for many satisfied clients.

To find out more, and for a fully confidential and initially free consultation: phone Paul Lynam now, on: 0845 643 9997