THE SWISS AUTHORITIES have handed over £340m to HM Revenue & Customs as part of an accord between the two countries, the chancellor has confirmed.
Osborne (pictured) hailed the payment as the first time "that money due in taxes has flowed from Switzerland to the UK", adding the development was "very welcome".
The deal forms part of an attempt by the UK to retrieve around £125bn in tax held in the secretive banking system and sees accounts held by individual UK taxpayers in Switzerland subject to a one-off deduction in 2013, as long as the account was open on 31 December 2010 and is open on 31 May 2013.
That deduction settles income tax, capital gains tax, inheritance tax and VAT liabilities in relation to the account. However, the deduction will not be applied if the account holder should instruct the bank to disclose details of the account to HMRC. Instead, the taxman would only seek unpaid taxes with relevant interest and penalties.
From this month onwards, income and gains derived from investments held by UK taxpayers in Swiss banks will be subject to a new withholding tax, with the rates comparable to the top UK rates and payment satisfying UK liabilities. The withholding tax will not apply if the account-holder authorises disclosure of details of income and gains to the taxman. However, should they fail to disclose their affairs fully and pay, penalties of up to 150% of the amount owed could be imposed.
"Tough action on tax evasion," said Osborne, is allowing the government to "support more job creation by further reducing the rate of corporation tax to 21%", according to the Telegraph.
"From the first of this month, we have been helping businesses large and small invest with a temporary tenfold increase in the annual investment allowance," he added.
According to the Treasury, the agreement could bring in as much as £5bn by 2018. Prior to the deal being struck, HMRC had only been able to glean details of interest payments on Swiss accounts by providing the Swiss with complete details of specific accounts – information seldom available. Instead, the Swiss will regularly notify the taxman of British holdings under the current deal.
You may also like
AccountancyAgeInsight is a frequently updated resource centre for finance professionals, offering a free and easy-to-use digital library of briefings, white papers and other information resources.