Taxman ready to swoop after deal with Swiss government

Holders of Swiss bank accounts are to be targeted by HM Revenue & Customs as a new deal brings an end to Switzerland's status as a tax haven, it has been claimed.

The government is said to be on the brink of finalising an agreement with Swiss authorities that it believes will raise up to 3 billion in tax revenues by 2015.

Under the deal - similar to one being announced by Switzerland and Germany - Britons holding money in Swiss accounts face a tax levy of up to 50 per cent on all assets held, plus a charge for any unpaid tax.

Critics of the deal say Swiss account holders are getting a better deal than ordinary UK taxpayers as they will be allowed to retain their anonymity, effectively legitimising their secret accounts.

Neil Whyte, tax partner at PKF accountants and business advisers, said: "HMRC has been trying to crack down on offshore tax avoidance with a number of initiatives, but Switzerland was always the main prize.

"Swiss insistence on anonymity for account holders has been the stumbling block but it seems that the impending deal will get around that by allowing account holders to remain anonymous provided tax is paid to HMRC. UK-based account holders will be forced to pay tax or move their money to a much riskier location."

The prospect of a 50 per cent tax rate will force many people to think twice about holding money in Switzerland, said Whyte.

"Paying this much just to retain anonymity could prove to be too high a cost for many, and account holders will need to consider their options carefully once the full details become available.

"In some cases, it may be that coming clean on past tax irregularities using the Liechtenstein disclosure facility will be a cheaper option, so we could see a move towards creating a financial presence in Liechtenstein."

The Liechtenstein disclosure facility, a partial amnesty launched by HMRC two years ago, raised more tax revenues for the UK government than it had expected. "It will be interesting to see if the UK-Swiss deal is as advantageous as the current UK-Liechtenstein agreement," said Whyte.

"Will it offer immunity from prosecution and give users the ability to disclose worldwide irregularities?"