Taxpayers with undeclared income and assets in Switzerland have reached the point of no return with HM Revenue & Customs.
From January 1, 2013, they must either pass the full details of their finances to HMRC or pay over a share of the cash in their bank account plus withholding tax.
Exchequer Secretary David Gauke said: “The days when hiding money in Switzerland in order to evade tax are over. Burying your head in the sand is no longer an option. The only realistic strategy is to talk to HMRC, as quickly as possible.”
To help taxpayers make the financial decision, HMRC has published an online guide here - www.hmrc.gov.uk/taxtreaties/swiss-dis-factsheet.pdf
Jennie Granger, HMRC Director General, Enforcement and Compliance, said: “Swiss banks or accountants are writing to people affected by the agreement. Some may be asking customers to close their accounts. If this happens, UK residents must ensure that any outstanding tax liabilities are paid. Anyone in these circumstances is strongly advised to contact HMRC as soon as possible.”
Swiss banks secrecy pledge
Meanwhile, the Swiss Bankers Association (SBA) has finally caved in to foreign governments over banking secrecy.
SBA president Patrick Odier declared Switzerland pledges not accept ‘one cent of black money’ in the future.
He went on to explain that the tax agreements negotiated with Germany, the UK, and Austria “offer a unique historical opportunity to draw a final stroke under the past and to manage the bilateral tax disputes fairly and definitively”.
Odier was speaking in response to criticism from opposition politicians in Germany who are claiming that reaching an agreement over tax was so slow with the Swiss authorities that wealthy investors had time to transfer their assets out of Switzerland before any action was taken.
Singapore tax treaty
The SBA had monitored this and confirmed only 0.4% of assets held by German taxpayers had left Switzerland in the past year – however without knowing how much the total assets held by Germans are wealth, the figure is somewhat meaningless.
The German Bundesrat votes on signing the treaty later this month.
Swiss banks have hinted that the main destination for outflowing assets is Singapore, which has just announced negotiations have started with the US Treasury over a reciprocal FATCA treaty giving details of US taxpayers financial affairs in the city state in return for data from the US regarding accounts held by Singapore taxpayers.
The move by Singapore is interpreted as a possible strengthening of tax ties with the US, UK and Europe.