British taxpayers with undeclared bank accounts or investments in Switzerland have just one last chance to tell-all to HM Revenue and Customs as a final declaration deadline has passed.
Up until May 31, 2013, British taxpayers had the option of telling their Swiss bank whether they were going to pay a one-off levy which would effectively settle their past UK tax liabilities or whether they were to give permission for their account details to be passed to HMRC.
This would give HMRC chance to scrutinise previous activity on that account.
Anyone not taking up these options will now see a one-off levy automatically applied.
The moves come after the UK/Swiss Tax Co-operation Agreement came into effect in January 2013.
The agreement is designed to ensure tax compliance by either imposing a charge at source or by giving detailed information of capital, along with gains and income, to HMRC which will then compare that information with tax records.
Voluntary disclosure
Account holders have already been warned to expect further questions if the information given by Swiss banks does not tally with previous tax declarations held by HMRC.
Any UK resident who believes there may be a tax liability linked to a previous transaction that HMRC may not have been told about are advised to take action now.
That means they should make a voluntary disclosure to the taxman of any outstanding amounts owed and settle that bill.
The government and HMRC believe that the one-off levy will see more than £5 billion being raised in the next six years.
In January alone, HMRC received £343 million in advance of direct deductions from Swiss customer accounts.
The new Swiss-UK agreement has fundamentally changed the way banking in Switzerland is conducted and will affect all UK residents who hold an account there.
How much HMRC is charging
The one-off levy being imposed will see accounts being hit by a charge of between 21% and 41% of their value, depending on a number of factors.
Only accounts open between December 31, 2010 and May 31, 2013 are subject to the new levy.
Accounts held by UK taxpayers in Switzerland who die after the agreement came into force will also be subject to a one-off 40% levy on their Swiss account.
Account holders should also be aware that there is no minimum amount for which their finances become eligible under the agreement and anyone deciding to move their assets to avoid the levy is warned that HMRC will track those assets down.
For more information about the agreement or to make a voluntary declaration, visit the HMRC Swiss Agreement web page: https://www.hmrc.gov.uk/taxtreaties/ukswiss.htm
