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Anglo-Swiss tax agreement moves step closer

Anglo-Swiss tax agreement moves step closer

Accountants for contractors may wish to warn clients with undeclared income in Swiss bank accounts, because further details have now been announced of the historic Anglo-Swiss tax agreement that would see UK citizens penalised for this.

UK taxpayers will face a penalty of between 19% and 34% of the total value of their Swiss bank account to cover past tax liabilities. Account holders can instruct their bank to disclose details of their account and HMRC will then look to recoup unpaid taxes, interest and penalties.

The UK will also have the right to request the bank account details of up to 500 suspected tax evaders each year, regardless of whether the owner of the account has authorised their bank to divulge the information.

The Treasury has also announced that the Swiss government is to hand over an upfront payment of £384 million as a gesture of good faith.

The agreement was approved last Wednesday by Dave Hartnett, the permanent secretary to HMRC, and Michael Ambuehl, the Swiss state secretary. Chancellor George Osborne said the days of hiding tax evasion profits in Switzerland are now over.

However, the charity Christian Aid, said the new deal lets tax evaders off too lightly at the expense of poor countries.

Loretta Minghella, a director at Christian Aid, said it seems extraordinary that the government seems to be letting tax evaders escape with little more than a normal tax bill. They will escape unpunished and their identities don’t even have to be revealed to HMRC. She went on to say that the agreement will have a serious effect on worldwide efforts to stop tax evasion.

The agreement should come into law in 2013 after it has been scrutinised by Parliament and the ratification procedures in Switzerland have been completed.

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Image: partnership agreement by o5com

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