UK close to Swiss tax deal

There has been much comment and speculation in the media recently on the landmark tax agreement between the UK and Switzerland which is close to signing (finalisation of the agreement is expected before the end of June 2011).

This agreement will result in an increase in the exchange of information between the two authorities.

Although the accounts will remain secret, UK residents with Swiss bank accounts will have to pay tax on interest earned at 50%. The tax will be collected by the Swiss government and passed on to the UK government.  It has been estimated that the agreement may raise £3 billion for the UK Exchequer.

The willingness of the UK to negotiate an agreement under which the Swiss government will, in affect, act as unpaid tax collector for HMRC, is perhaps a sign of the government's intense need to raise additional revenues. 

The number of safe havens for tax evaders is rapidly diminishing. Those individuals with income arising from Swiss bank accounts, who are liable to UK tax, could risk serious consequences if such income remains undisclosed.