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.”
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