Swiss deal 'could cost billions'

THE DEAL between the UK and Switzerland could cost the Exchequer billions, the Tax Justice Network (TJN) has warned.

The research group has said that HM Revenue & Customs' estimates of up to £7bn being collected are improbable and the real figure will be closer to £1bn. Because multilateral efforts to make Switzerland more transparent have been affected by this deal and a similar one between Germany and Switzerland, the deals could cost the UK in the long run.

The agreement will impose a one-off payment on the capital in Swiss accounts and will charge a withholding tax on future payments. However, TJN says it has identified ten loopholes that will make it easy for the most aggressive evaders to avoid the charges.

These include: a failure to tackle discretionary trusts, foundations and similar structures; the ability of evaders to move their money to branches in other countries; and the fact that the withholding tax does not extend to wages, royalties, income on property or loans.

An HMRC spokesman said: "The Swiss agreement will deliver billions of pounds to the UK that would otherwise have been lost. It will deliver significantly more than under the EU agreement with Switzerland."