Swiss agreement "to create 50% withholding tax"

BRITONS WITH MONEY hidden in Swiss bank accounts will be subject to a 50% withholding tax, reports have suggested.

The Financial Times reports that a "source close to the negotiations" has said that the 50% levy has been agreed with Switzerland, which will collect the taxes on behalf of the UK government.

The deal, which will be announced in the next month, is expected to raise £3bn for the Exchequer. The report said that investors will be required to pay a one-off retrospective levy in recognition of past unpaid tax, though account holders will retain their anonymity under the agreement.

Andrew Watt, managing director at Alvarez & Marsal, told the FT that this agreement would have been unthinkable two years ago. "However inadequate the agreement, even if it is just a small chink of light, it is still astonishing," he said.

This move has sparked complaints from Liechtenstein, with which the UK has had a longstanding agreement that charges account holders lower-than-normal penalties with immunity from prosecution.