The Government has reached a historic deal with Switzerland to crack down on offshore tax evasion in a move that will boost the Treasury's coffers by £5 billion from 2013.
Chancellor George Osborne declared that the agreement would stamp out abuse of Swiss banking secrecy, ending the days when it was “easy to stash the profits of tax evasion in Switzerland”.
Existing funds held by UK taxpayers in Switzerland will be subject to a one-off deduction of between 19% and 34% to settle past tax liabilities, leaving those who have already paid their taxes unaffected.
As gesture of good faith, Swiss banks will make an upfront payment from Switzerland to Britain of 500 million Swiss francs (£384 million).
UK residents with funds in Swiss bank accounts will also be levied with a new withholding tax -- a tax deducted from income at the source -- of 48% on investment income and 27% on gains.
This will be accompanied by a new information-sharing initiative designed to make it easier for HM Revenue and Customs (HMRC) to find out about Swiss accounts held by UK taxpayers.
The new charges will not apply if the taxpayer authorises a full disclosure of their affairs to HMRC, the Treasury added.
Mr Osborne said: “Tax evasion is wrong at the best of times, but in economic circumstances like this it means that hard-pressed, law-abiding taxpayers are forced to pay even more.
“That is why this Coalition Government made it a priority to go after those who don’t pay their fair share.
“We will be as tough on the richest who evade tax as on those who cheat on benefits.
“The days when it was easy to stash the profits of tax evasion in Switzerland are over.”
David Gauke, Exchequer Secretary to the Treasury, said: “This historic agreement will enable us to collect billions of pounds from those who have for too long evaded their responsibility to pay UK tax by abusing Swiss banking secrecy.
“The message is clear. There is no hiding place for tax cheats.”
But Chris Oates, head of the tax controversy team at accountancy firm Ernst & Young, warned: “We could see an increase in people moving their assets to Liechtenstein rather than paying up to the Swiss.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article