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HMRC to hand out higher penalties for secret Swiss accounts

HM REVENUE & CUSTOMS have been given the go ahead to dish out higher penalties to individuals with secret bank accounts in Switzerland.

Under a revised deal signed this week, a one off repimand will see individuals having to cough up former unpaid tax at a rate of 41%, instead of 34% – in line with a similar deal struck by the Swiss and Germany. The UK had a clause allowing its deal to match any rises agreed in the Swiss-German accord.

Under the terms of the revised deal, holders of Swiss accounts will have the opportunity to make good their activities by paying the one-off penalty and a withholding tax on the income of the accounts thereafter.

HMRC believes they can claw back hundreds of millions under this initiative. The Treasury had previously stated it expected to bring in between £4bn and £7bn, but the Office of Budget Responsibility has cast doubt on that estimate.

The amnesty has drawn criticism for allowing those engaging in the practice to retain their anonymity, the trademark of Swiss banking.

Critics have said the move also undermines the drive for the international exchange of information, emphasised by rules announced in the US government this week allowing it to collect and exchange information on foreign nationals holding American bank accounts.

An HMRC spokesman said: “The original rates agreed followed very tough negotiations. We still believe those rates were broadly at broadly the right level.

“But it is fair to all UK taxpayers to make similar amendments in our agreement to the tax rates provided for in the CH/DE agreement.”

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