As part of the UK government’s efforts to clamp down on tax evasion and retrieve around £125bn in tax held secretively in Swiss bank accounts, the UK and Switzerland began the monthly exchange of tax information on 31 July.
Certain accounts held by individual UK taxpayers in Switzerland will be subject to a once-off “withholding tax” deduction in 2013. Only those accounts that were open on 31 December 2010 and still open on 31 May 2013 will be subject to the deduction.
The tax will not apply if the account-holder authorises disclosure of details of income and gains to HMRC. But if they fail to fully disclose their affairs, penalties of up to 150% of the amount owed could be imposed.
HMRC’s Offshore Co-ordination Unit will analyse the data as the government prepares to receive further payments.
According to Gareth Edwards, Accounting Manager at 1st Contact, those with accounts held in Switzerland should make a voluntary disclosure as soon as possible.
“To avoid hefty penalties and legal complications, anyone with money held secretively in Switzerland should make full disclosures without delay,” says Edwards. “We would also not recommend that you close the account and move the funds to another jurisdiction, as Swiss banks have agreed to not assist individuals to avoid the once-off charge. They will however inform the UK authorities of the top 10 destinations where funds have been transferred.”