Swiss Bank Account? Happy New Year…
Switzerland. Famous for chocolate, cuckoo clocks, Alps and, of course, secretive bankers. For years, those so inclined could have squirrelled cash away in the mountains, certain in the knowledge that their Swiss banker would rather cut out his own tongue than disclose details of their clients' booty.
However, over recent months and years, HMRC have been working on the Swiss Authorities to get them to cough on their UK account holders. And from 1 January, the famous Swiss stonewall will have more holes than, well, Swiss cheese.
Where account holders are also UK taxpayers, Switzerland are going to tell HMRC about you. Even if you do nothing, even if you don’t tell HMRC anything and even if you close your account, HMRC claim they will still get their money. They ask you to note that attempts to remove cash from accounts before 31 December 2012 “may not be cleared”.
The amount of tax that will be taken, assuming you are liable to UK income tax on your worldwide income (as most UK residents are) and don’t ‘fess up will range between 27% and 48%, depending on the type of income or gains. There are special rules for those who are non-UK domiciled- aren’t there always- and HMRC have even produced a handy factsheet for those who may be concerned about their hidden millions. In future, tax will be deducted from relevant accounts via a ‘withholding tax’, ie they withhold it from your account whether you like it or not.
Exchequer secretary David Gauke boasted, “The days when hiding money in Switzerland in order to evade tax are over. Burying your head in the sand is no longer an option. The only realistic strategy is to talk to HMRC, as quickly as possible.”
Jennie Granger, HMRC director general, enforcement and compliance, added, “ Swiss banks or accountants are writing to people affected by the agreement. Some may be asking customers to close their accounts. “
Now, while we welcome readers from any background, and some of you are from very strange places indeed, we suspect there aren’t many of you who have Swiss bank accounts. But does that matter? Are we comfortable with HMRC being able to prevent you withdrawing cash from a bank account in a foreign country even if, strictly speaking, you should have paid it over in tax? Do these people deserve to cough up, even under duress, or is it slightly too Big Brother (1984, not trashy reality TV) for your liking? Is this what we meant by HMRC getting tough on tax avoidance?