Swiss offshore bank accounts
The UK and Switzerland signed a landmark tax agreement which introduced significant changes to the taxation of offshore bank accounts in Switzerland. The changes came into effect on 1 January 2013. Under the agreement UK taxpayers had two options. The first option was to make a full disclosure oftheir existing banking relationships in Switzerland and pay any outstanding taxes, interest and penalties. Under this option the taxpayer provided authorisation for disclosure of their Swiss assets to the Swiss tax authorities for onward submission to HMRC.
The second option (or fall-back position if no disclosure is made) was to make a one-off tax payment deduction on 31 May 2013 to settle past tax liabilities. The deadline for making a disclosure has now ended and taxpayers will automatically be subjected to the second option, a one-off levy.
The Federal Tax Administration (FTA) of Switzerland has transferred £440m to the UK during this financial year on top of a £342 million one-off payment. However, HMRC were criticised recently by Margaret Hodge, chair of the Public Accounts Committee (PAC) who said that the expectation that the government would raise £3.1bn from offshore Swiss accounts was‘completely unrealistic’. It is likely that next month’s Autumn Statement will see a drop in the expected tax haul.