A deal has been agreed on by Switzerland and Britain, which will see money that is kept by British residents in secret Swiss bank accounts taxed. This deal will achieve two things, firstly it will give the struggling British governments a much needed windfall and secondly it will help Swiss banks come clean on untaxed bank accounts.
Subject to a levy
The Swiss finance ministry have stated that under the deal, money held by residents of Britain with Swiss banks will be subject to a levy that will lie between 19-34% of the account balance and a going forward a withholding tax will also be applied.
The Swiss bankers’ association have openly welcomed the new agreement between the two countries but taxation experts are wondering whether this deal was in the best interests for Britain.
The details of the deal will see the Swiss banks paying 500 million Swiss francs ($630 million) at the start and the retro-active levy could potentially net the British government £5 billion ($8.2 billion). The deal has been fuelled by the British governments need to boost revenue as it is starring at one of the biggest deficits among the first world nations.
George Osborne has said that he is driven to coming down hard on tax evasion, and his goal is to remove a budget deficit of more than 10% over the next four years. This will be through a very tough program which includes big cuts in public expenditure.
Move to Liechtenstein
In the statement the Chancellor of the Exchequer said: “We will be as tough on the richest who evade tax as on those who cheat benefits. The days when it was easy to stash the profits of tax evasion in Switzerland are over.”
It is important to remember how shrewd people are and this deal between the UK and Switzerland may force Britons to jump over the border to Liechtenstein and put their money in their banks.