The incompetence and uneven approach of HMRC has been exposed once more in the Treasury’s deal with Swiss authorities. The Treasury’s attempt to tax wealthy individuals who hide their assets in Switzerland was declared an embarrassing failure by experts on Friday after the Swiss authorities said it would generate only a small fraction of the expected £3.2bn haul
According to the Swiss Bankers Association (SBA), the deal does not apply to most UK nationals who keep their cash in Swiss banks because they are not domiciled in the UK.
The SBA said the UK may get little more than a CHF500m (£347m) minimum levy agreed with the UK after individual banks found only small sums from UK citizens were caught by the deal.
According to the Treasury’s red book, which forecasts tax revenues over the next five years, a one-off levy on Swiss assets owned by UK residents, ranging from 21% to 41%, was due to raise £3.2bn in this tax year.
A withholding tax on future gains and income of up to 43% was expected to rake in £610m in years 2014-15 and £920m in the following year.
The Swiss declaration is not only embarrassing for the Treasury, it also knocks a sizeable hole in public finances as the Office for National Statistics included the £3.2bn in May’s public accounts.
There is a view that the tax treaties between Switzerland and the UK should be torn up.
The Swiss withholding tax model is now dead. Dave Hartnett, David Gauke and the Treasury having sanctioned this deal surely must now hang their heads in shame,
“It’s the rich wot gets the pleasure, it’s the poor wot gets the blame – ain’t it all a bloody shame!”
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