HMRC Gets 342m in Swiss-UK Tax Deal

04 February 2013

HMRC has received £342m from Switzerland as a result of the Swiss-UK tax deal which came into force on 1 January.

This payment is being made by Swiss banks in advance of the one-off charge being levied on their customers. Under the deal, the Swiss are taxing the bank accounts of UK citizens and transferring the money directly to the Treasury without revealing the identity of account holders.

A reputation of strict secrecy has allowed Switzerland to build up a $2 trillion financial sector. However, since the financial crisis, the country has faced a concerted campaign against tax evasion by international governments.

The £342m is just the first instalment, however the Revenue is expecting the deal to add £5bn of previously unpaid tax to their coffers by 2018.

Under the tax agreement, current and future tax liabilities in Swiss accounts will be covered by a new withholding tax of 48% of income. The Swiss authorities will now routinely notify HMRC about British holdings, meaning those with Swiss assets, even undeclared, will find themselves under the scrutiny of HMRC.

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