Switzerland informs UK over Bank Deposit Movements
Swiss banks were required to hand over information about deposit movements to UK authorities by May 31, 2014, to support UK efforts to track down untaxed income.
This was required under an agreement between the UK and Switzerland, which sought a middle ground on respecting Switzerland’s banking privacy laws. Under the agreement, Swiss banks were required to disclose the top ten locations to which moved funds were transferred.
Jason Collins, Head of Tax at law firm Pinsent Masons, said: “The Swiss/UK treaty has already dramatically increased the amount of information that HM Revenue and Customs (HMRC) has on possible tax evaders. The hit list of top ten countries will be another piece of the jigsaw. HMRC will now know exactly where to focus its efforts.”
The information was secured under a landmark deal on undeclared Swiss bank accounts held by UK residents, which entered into force in January 2013. Individual accounts, open between December 31, 2010, and May 31, 2013, became subject to a one-off levy of between 21 and 41 percent. Account holders who failed to authorize full disclosure of their information to HMRC faced a withholding tax of 48 percent on investment income and 27 percent on gains.
According to Pinsent Masons, HMRC believes that four out of every five UK residents holding a Swiss account are guilty of tax evasion. The Department is consulting on a new “strict liability” criminal offence for not declaring income derived from an offshore asset. If legislation to this effect was passed, HMRC would not have to prove an intent to secure a conviction.
Collins said: “It’s essential that those with unpaid taxes due on their overseas accounts move quickly. If they do not come forward now they will find themselves facing fierce investigations by HMRC. HMRC know that for amnesty schemes, like the Liechtenstein Disclosure Facility, to work then they make some very public examples of those tax evaders who turn down the offer of an amnesty.”
“With higher penalties for those who are caught and the risk of strict liability offences being dished out like parking tickets, the risk-reward ratio is increasingly stacked against the evader.”
Source: taxnews
