Tax Evasion Net Tightened After Swiss Deal
UK taxpayers will find it harder to ‘hide’ money from the tax collector in Swiss accounts, an industry body has said, following a deal made with the Swiss authorities.
Money held by UK taxpayers in Swiss band accounts will be taxed for the first time following further details being released, and concerns that it offered an amnesty for some tax dodgers.
The Charter Institute of Taxation (CIOT) said that lawbrakers could be prosecuted. Gary Ashford of the CIOT said, “This is a significant agreement which opens a new chapter in tackling international tax evasion. Rightly, the net is tightening on those who think they can keep money in offshore bank accounts out of sigh of the tax man.”
The terms of the deal the Swiss with tax the UK taxpayers bank accounts from 2013 and transfer the money directly to the treasury. The bank accounts will be taxed by the Swiss authorities between 19% and 34%, depending on the length of time the account has been open. The Swiss have made a 500million Swiss fancs (£385m) initial down-payment.
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UK account holders in Switzerland will also face an annual levy on the income of their accounts from 2013 between 27% and 48%, depending on if their income has arisen as capital gains, interest or dividends. As part of the deal, UK authorities could track down and tax money in offshore bank accounts, with a total estimate of £5billion being handed over to the HM Revenue and Customs, by the Swiss authorities. The UK authorities have also been given access to details of up to 500 UK individual accounts per year, to take for further investigation.
Swiss banking laws provided complete secrecy for foreigners with bank accounts for decades. Allowing the account holders to hide large amounts of money from their own tax authorities, without having to pay a penny in Swiss tax.
The details of the deal have now been published and it now offers opportunities to tackle evasion, especially if people try to move their money from existing offshore accounts. Chas Roy-Chowdhury, head of taxation at the ACCA, has said that more than the 500 names originally agreed could be provided to the UK tax authorities for further investigation. People should come clean or face a stiff penalty.
Charity Christian Aid director Loretta Minghella, has disagreed with the deal and said that, “This deal makes it much less likely that developing countries will ever be able to get the taxes owed to them from those hiding money in tax havens like Switzerland. It is a disgrace.”
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