The tax agreement between the United Kingdom and Switzerland was signed on 6 October 2011 in London.
The UK-Swiss tax agreement is set to come into play in 2013 and will ensure that a one-off ‘withholding tax’ is collected from Britons holding deposits in undisclosed Swiss bank accounts.
Originally, British taxpayers holding Swiss bank accounts were expected to pay a one-off ‘withholding tax’ between 19-34% of their offshore balance; dependant on how long their deposit had been held in a Swiss offshore bank account.
Under revised terms of the UK-Swiss tax agreement, Britons holding undeclared deposits in Swiss bank accounts will be required to pay a one-off ‘withholding tax’ between 21-41% of cash balances; seeing the upper limit of the one-off payment increase by 7%.
Increases in the one-off ‘withholding tax’ will make the UK-Swiss agreement more expensive for Brits who choose to take part in the opportunity.
Revisions to the UK-Swiss tax agreement emerge as a similar deal has been made between Germany and Switzerland.
The German and Swiss tax evasion treaty will require German nationals holding undeclared Swiss bank accounts to make a one-off payment between 21-41% of the undeclared money held in Switzerland; the new tax treaty between Germany and Switzerland is thought to be the catalyst for increasing UK-Swiss one-off ‘withholding tax’ payment limits.
With the UK-Swiss ‘withholding tax’ increasing to 21-41%, it is thought that Britons holding undeclared Swiss bank accounts may instead turn to the Liechtenstein Disclosure Facility (LDF), which incurs a 10% tax penalty for those declaring assets through HMRC’s LDF tax amnesty campaign.
The Liechtenstein Disclosure Facility is available until the end of March 2015.
One advantage of the UK-Swiss ‘withholding tax’ is that those using the deal will maintain full anonymity. Those who choose to take part in the LDF would be required to make a full disclosure, which will allow tax inspectors to calculate what should be on future tax returns and will provide HMRC with more information on British taxpayers holding assets offshore.
If you have avoluntary disclosure to make to HMRC for Offshore Income then we can do this for you.
KinsellaTax staff consists of ex-HM Inspector of Taxes and ex-HM Custom and Excise Officers, fully experienced in HMRC investigations.
Don’t wait for HMRC to open a tax evasion enquiry into your affairs; contact us before HMRC contact you.
To speak with a professional about a voluntary disclosure call 0800 471 4546, or click here to send us your tax enquiry.