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Changes have been made to the tax agreement between the UK and Switzerland in respect of undisclosed Swiss bank accounts held by UK taxpayers.
Under the revised terms, the upper limit of the one-off payment due on cash balances has been increased from 34% to 41%, while the lower limit has risen to 21% from 19%.
The amended rates come in response to a similar accord made between the German and Swiss tax authorities, and make the UK-Switzerland deal more expensive for individuals who take up the opportunity it offers.
Tax investigation expert John Cassidy said the only reason to make use of the deal now would be ‘to maintain anonymity’.
He added that ‘the increase in the withholding tax rate is likely to nudge more individuals towards the Liechtenstein disclosure facility (LDF), which was likely to be the cheaper option for many even before the [UK-Swiss] deal was revised’.
Mr Cassidy, a tax investigation and dispute resolution partner at the PKF accountancy group, said the LDF, the memorandum for which was improved earlier this year, is beneficial for HMRC because it provides them with more information about individuals with overseas assets.
People who enter into the LDF are obliged to make a full disclosure, meaning inspectors ‘will be able to work out what should be on future tax returns’.
