HMRC’s ground breaking Swiss Tax Agreement came into force on 1 January 2013 and has already delivered CHF500 million as the first tranche of revenue to the UK taxman.
Under the agreement, UK citizens with Swiss bank accounts have the option of either making a disclosure to HMRC, or suffering the deduction of tax at source. Large numbers of people decided to make voluntary disclosures, particularly using the Liechtenstein Disclosure Facility. Some are disclosing using the Swiss Tax Agreement (STA) to HMRC’s Offshore Coordination Unit. However, many others have elected to have tax deducted at source. Where the deduction option is chosen any past tax liabilities will be dealt with by paying a one-off charge of up to 41% of the total value of the account.
This is the first instalment of that levy on the accounts of UK taxpayers in Switzerland: partly to cover arrears of tax that should have been paid to the UK. CHF500 million Swiss francs is about £342 million. The payment was made by the Swiss banks in advance of the one-off charge being levied on their customers.
Current and future tax liabilities will be covered by a new withholding tax. Rates currently range from 27% for capital gains up to a maximum of 48% for interest or other non-dividend income.
The Exchequer Secretary said: “Our agreement with the Swiss Government will deliver around £5 billion of previously unpaid tax to the UK. Offshore tax evasion costs the UK billions of pounds every year and we are determined to tackle it. One of the ways is through information exchange and this agreement makes it easier for HMRC to obtain information about UK taxpayers suspected of hiding money in Switzerland.”
Under the terms of the STA the taxman will also be given intelligence about the destinations of those who try to evade paying their taxes by moving money out of Switzerland to what HM Revenue & Customs call “the ever diminishing stock of tax havens”. Anyone doing so risks tax-geared penalties of up to 200%, if caught.
How can Lynam Tax Disclosure Experts help me?
Lynam Tax experts have a massive amount of experience in dealing with UK tax payers with offshore bank accounts. We are currently helping a large number of people with such disclosures; particularly the use of the Liechtenstein Disclosure Facility.
Do not delay! Call Paul Lynam now on 0845 643 9997
or Andrew Nutbrown: 0771 877 8710