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Are we about to see changes to the Anglo-Swiss tax agreement?

Are we about to see changes to the Anglo-Swiss tax agreement?

Britons with money salted away in Swiss bank accounts might find themselves paying more tax after changes were made to the Anglo-Swiss tax agreement.

The original agreement was that a withholding tax of between 19% and 34% would be levied on Swiss bank accounts belonging to British citizens. The banks would deduct the tax and forward it to the Treasury, but account holders would still remain anonymous. This arrangement was due to come into force in May next year.

Germany has an agreement that is almost identical to ours and the tax authorities there recently negotiated an increased withholding tax of between 21% and 41% for its citizens.

John Cassidy, a partner at PKF, said he would be surprised if the UK did not attempt to implement a similar increase. The coalition wants to raise as much revenue as possible from this agreement given the current economic climate.

Experts say that the threat of changes to the Anglo-Swiss agreement will make the Liechtenstein tax disclosure facility seem even more attractive to UK tax evaders. Critics of the current arrangement say the deal with Switzerland is too soft, although most tax experts have welcomed it.

The government has not revealed how much it hopes to bring in from the Swiss deal but it is thought it could increase Treasury coffers by more than £5 billion a year. The Germans are expecting to raise around £8.3 billion over the next 12 months from their deal with the Swiss.

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Image: Swedish Flag by flo_p

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