Banks pay HMRC half a billion Swiss francs

The ground breaking tax agreement between the UK and Switzerland which came into force on 1 January 2013 has delivered £342 million as the first tranche of revenue to the UK. 

This is the first instalment of a levy on the accounts of UK taxpayers in Switzerland to cover arrears of tax that should have been paid to the UK.

Current and future tax liabilities will be covered by a new withholding tax of 48 per cent on income.

Under the agreement, people with taxable assets in Switzerland have a choice of authorising their financial institution to disclose the details to HMRC or have the levy and withholding tax applied by the institution.

Exchequer Secretary David Gauke said:

“Our agreement with the Swiss Government will deliver around £5 billion of previously unpaid tax to the UK.

“The first down payment of 500 million Swiss francs has now been received. This is money which was owed to the UK and has now been paid.

“Offshore evasion costs the UK billions of pounds every year and we are determined to tackle it. One of the ways is through information exchange and this agreement makes it easier for HMRC to obtain information about UK taxpayers suspected of hiding money in Switzerland.”

Notes for editors

1. The UK-Swiss tax agreement was signed on behalf of the UK by Exchequer Secretary David Gauke in London on 6 October 2011. It came into effect on 1 January 2013.

2. HMRC will also gain intelligence about the destinations of those who try to evade paying their taxes by pursuing the ever diminishing stock of tax havens. These individuals risk penalties of up to 200 per cent when caught, so the only realistic option is to talk to HMRC about the best way to get on the straight and narrow.

3. HMRC has recently published a handy guide to the agreement: http://www.hmrc.gov.uk/taxtreaties/swiss-dis-factsheet.pdf.

As well as explaining the options available under the agreement, this factsheet provides details of the other ways in which individuals can ensure that their tax affairs are brought up to date. It includes contact details for those who now wish to make a direct disclosure to HMRC.

3.1. Where the payment option is chosen any past liability to specified taxes will be dealt with by paying a one-off charge of up to 41 per cent of the total value of the account.

There will be a withholding tax to deal with the tax on income and gains. Rates currently range from 27 per cent in respect of capital gains up to a maximum of 48 per cent for interest or other non-dividend income.

4. Five hundred million Swiss francs is approximately three hundred and forty million British pounds at current exchange rates.

5. The payment is being made by the Swiss banks in advance of the one-off charge being levied on their customers.

6. Account holders should contact:

Specialist Investigations

Offshore Coordination Unit S0987

PO Box 29992

GLASGOW

G70 6AB

Email contact: swissagreement.hmrc@hmrc.gsi.gov.uk

7. Follow HMRC on Twitter @HMRCgovuk

8. HMRC’s flickr channel www.flickr.com/hmrcgovuk