Last days of tax avoidance through a “Swiss” bank account?

An agreement under discussion between the UK and Switzerland is likely to see a 50% withholding tax deducted by Swiss banks and paid over to the UK, while the two parties circle around the thorny question of tax compliance versus secrecy. How much information the two countries will agree to share is far from certain, but it seems ever more likely that HMRC will be focusing on those who have avoided UK tax through Swiss accounts.

Details are likely to be finalised in the next few weeks but there are few signs that there will be a further opportunity to “come clean” to HMRC on so-far undisclosed foreign income and gains, as is possible now under the low-penalty Liechtenstein Disclosure Facility (LDF) – the current “last chance” offered by HMRC following two previous “one-time only” opportunities to make full disclosure, in 2007and 2009.

The LDF offers a number of advantages for someone wishing to be fully UK-tax compliant:

• Although HMRC will charge the full amount of interest due, the penalty is fixed at 10% of the unpaid tax
• Disclosure is not required for periods before April 1999 (normal rule is 20 years, on discovery)
• There is a 40% alternative composite tax rate (useful if, for example, both income tax and national insurance contributions are unpaid)
• there is certainty that the taxpayer will not be the subject of criminal prosecution

Disclosure under the LDF is still available – even if you do not currently have accounts in Liechtenstein.

Buzzacott has a team specialising in LDF disclosures. Contact Akin Coker if you wish to discuss any questions you may have in the short time which may be available.