Thanks to talks between the Treasury and Swiss authorities, Switzerland has agreed to support the UK’s efforts to tax offshore accounts.
Chancellor of the Exchequer, George Osborne, and Swiss finance minister Hans-Rudolf Merz held talks and agreed to begin negotiations to ensure Britons pay the correct amount of tax in early 2011.
The UK expects to agree to a withholding tax that would be applied by the Swiss authorities and paid directly to the UK exchequer.
Currently the Swiss have stringent laws in place stating that unless HMRC can provide a name and say which bank an account is held with, they will not give any details on people who have accounts.
Although some countries, such as France and the US, automatically send complete information to HMRC on accounts held by UK taxpayers, the Swiss law forbids this.
As a result of Switzerland’s appealing secrecy laws, they have been successful in building up a £1.26 trillion offshore wealth management industry.
It is quite plain to see why they want to hold on to their privacy laws but in recent years they have come under increasing amounts of pressure to soften their approach in order to catch global tax evaders.
It is understood that the most recent negotiations are a result of the EU’s attack on secret bank accounts in Switzerland and is expected to raise £1bn in extra revenue.
Although the negotiations are in their very early stages, they are likely to include calls for a much broader exchange of information between Swiss banks and HMRC.
HMRC have attempted to claw back unpaid tax in recent years by using tax amnesties offering lower tax penalties but have been relatively unsuccessful.
HMRC failed to entice UK taxpayers into declaring additional tax and so have now turned to putting pressure on Swiss officials in a desperate bid to collect additional revenue.
The Treasury is understood to believe that striking a deal with the Swiss authorities is the only remaining route they have left to take advantage of in order to generate tax from Swiss bank accounts.
Earlier this year Rome authorities managed to raise more than €15 billion from Swiss banks through the use of a tax amnesty proving that amnesties do work. Maybe HMRC just aren’t doing enough to entice British taxpayers to cough up.
If the rumours prove to be true then it could mean that hundreds of UK taxpayers will take their money from Switzerland and flee with it elsewhere.
This will damage Switzerland’s reputation as a safe tax haven and may still not give HMRC the desired result!
But remember, the risks are simply too high.
If you haven’t paid your taxes and have money or assets hidden around the world, you NEED to declare it to HMRC.
A voluntary disclosure to HMRC gives way to lower penalties and if you declare it sooner rather than later then there will be less interest to pay to HMRC.
KinsellaTax are the ones to make your voluntary disclosure to HMRC for you.
To speak to one of our tax investigation experts today call 0800 471 4546.
Don’t wait any longer, get it sorted NOW before HMRC catch you.