THE UK AND SWITZERLAND are to commence the monthly exchange of tax information from 31 July, as the government continues its efforts to clamp down on tax evasion, avoidance and secrecy.
An accord struck between the two countries in April last year forms part of an attempt by the UK to retrieve around £125bn in tax held in the secretive banking system globally and sees accounts held by individual UK taxpayers in Switzerland subject to a one-off deduction in 2013, as long as the account was open on 31 December 2010 and on 31 May 2013.
Information will be exchanged on a monthly basis from the Swiss Confederation to HMRC on 31 July 2013 with the last communication of such information by 31 December 2013.
Under the scheme, income and gains derived from investments held by UK taxpayers in Swiss banks will be subject to a withholding tax, with the rates comparable to the UK top rate of tax and payment satisfying UK liabilities.
The withholding tax will not apply if the account-holder authorises disclosure of details of income and gains to the taxman. However, should they fail to disclose their affairs fully and pay, penalties of up to 150% of the amount owed could be imposed.
The Swiss authorities handed over £340m to HM Revenue & Customs as part of the deal in January, with more expected to follow according to the chancellor.
It is believed that HMRC’s Offshore Co-ordination Unit – the specialist unit which will be processing the Swiss data – is gearing up to analyse the data as the government prepares to receive further payments.
BDO tax director Dawn Register said: “There has been a lot of speculation in recent months around what the yield from the UK/Swiss tax agreement will be, with some predicting that yield from voluntary disclosures will be higher than expected. As such we expect that there will be intense scrutiny over how HMRC deal with the information flowing to them from the 31 July.
“We expect HMRC will launch investigations using the information received from Switzerland soon after 31 July 2013, therefore anyone with a potential tax problem should consider making a voluntary disclosure without delay.”