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The UK-Swiss tax accord is set to come into force in the new year, having overcome its final obstacle.
The deal – which targets bank accounts held in Switzerland by British taxpayers – looks certain to apply from 1 January 2013 as planned, after Swiss campaigners seeking a national vote on the matter failed to garner enough support.
Tax investigations expert John Cassidy said, “The threat of a referendum was the last hurdle for the authorities. Now it has gone, officials will be pressing on with implementing the agreement and raising considerable tax revenue from the Swiss accounts of UK-based individuals.”
The anti-evasion accord was confirmed in October 2011, when it was described by HMRC as “historic”. It has since been the subject of revisions including one that increased the upper and lower limits of the one-off levy imposed on affected individuals.
Balances of Swiss bank accounts held by UK taxpayers will be subject to a single charge of between 21% and 41% on 31 May 2013, to settle income tax, capital gains tax, inheritance tax and VAT debts owed to HMRC.
In addition, there will be a withholding tax of 48% on interest, 40% on dividends and 27% on gains to satisfy UK tax liabilities.
Cassidy, a partner with PKF, warned that the contract between the UK and Swiss governments will be a high-cost option for people with undeclared assets in Switzerland.
“Such individuals can usually get access to the Liechtenstein disclosure facility, which is almost always going to be the cheaper option. The only sensible reason to use the UK-Swiss deal is to maintain anonymity, but you have to be prepared to pay heavily for that privilege,” he added.
