A Swiss campaign to block tax deals between the Berne government and the UK, Germany and Austria has failed to gain support.
A protest group launched a petition in a bid to force a national referendum on plans.
They needed 50,000 votes to go to a vote – and narrowly missed the total by gaining 47,554 signatures.
The last-ditch protest was the final hurdle for the deal with the UK, which will now start from January 1, 2013.
The agreement levies a withholding tax of between 21% and 41% on the balances held in Swiss accounts on May 31, 2013, as compensation for evading tax due in the on the funds.
High cost option
John Cassidy, a tax investigation and dispute resolution partner at tax advisers PKF, said: “The threat of a referendum was the last hurdle for the tax authorities. Now that has gone, they will be pressing on with implementing the agreement and raising considerable tax revenue from the Swiss accounts of UK-based individuals. Anyone who was counting on a referendum to delay or scupper the deal should now think very carefully about their position.”
“The UK-Swiss deal is a high cost option for those who have 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 your anonymity – but you have to be prepared to pay heavily for that privilege.”
The Liechtenstein Disclosure Facility (LDF) offers:
- A guaranteed immunity from prosecution for tax offences
- “No names” discussions with HMRC, prior to making a disclosure.
- Tax liability limited to the period from April 6 1999 as opposed to the normal 20-year rule.
- A simplified tax rate to reduce liabilities
The LDF is open until March 31, 2016, and can be used by UK taxpayers who want have undisclosed earnings or assets in offshore accounts.
£3 billion of unpaid tax
So far, HM Revenue & Customs says the LDF has been so popular that more than 2,000 people have disclosed almost £3 billion of unpaid tax.
The success has prompted HMRC to double the number of staff working on the LDF and to widen the disclosure availability to other countries.
Ray McCann of accountants Pinsent Masons the government sees “strong potential” for recovering “substantial additional tax liabilities” from even moderately well-off individuals.
“Many such taxpayers assume that they understand and can complete their self-assessment tax returns without professional help; however, the complexity of capital gains and other taxes as well as numerous anti-avoidance rules make mistakes inevitable,” he said. “It is certain that there will be more investigations and together with HMRC’s much tougher approach to penalties, some taxpayers may be faced with a very substantial back tax bill.”