Jeff Salway: Swiss deal is a winner for tax evaders, not for honest taxpayers

The deal to secure tax from secret Swiss bank accounts has been presented as a victory for UK taxpayers, but it’s nothing of the sort.

The biggest winners in this are the Swiss account holders who not only benefit from a lenient tax penalty regime, but also get to keep their anonymity. It adds to the overwhelming feeling that the rules for the rich remain quite different to those imposed on the rest of us. But then what would you expect from a party with a tax avoider for a deputy party chairman?

The agreement that opens up Swiss bank accounts to the UK tax authorities has been on the table for some time and will have sent thousands of nervous account holders scurrying to their accountants.

But while the agreement between the UK and Switzerland represents progress, tax evaders are getting off lightly. The revenue it will bring in is a boon to government coffers, but the message it sends out to taxpayers under the cosh from HM Revenue & Customs is that honesty doesn’t pay, crime does.

While those hiding their fortunes in Swiss bank accounts get to keep their identity secret and a one-off tax of up to 34 per cent – as opposed to the 50 per cent most Swiss account holders would pay in the UK – the taxman is taking an increasingly zero-tolerance approach towards ordinary taxpayers.

Harsh new late payment penalties are set to send resentment towards HMRC up to hitherto uncharted levels. Late filing used to attract a £100 fine, but new rules introduced in April add a £10-a-day fine to the equation, with some penalties reaching hundreds of pounds.

This isn’t a fine for evasion but for late filing, and it stands even if it transpires that the individual didn’t owe anything.

The way in which it is enforced will raise more questions over fairness, with HMRC’s definition of a reasonable excuse for late payment leaving very little room for legitimate explanations. Its increasingly aggressive approach towards taxpayer fallibility contrasts of course with its own competence, with the revenue’s chairman recently forced to apologise for its poor performance.

Ronnie Ludwig, whose latest tax column appears elsewhere on this page, has described the Swiss agreement as a “slap in the face” for honest taxpayers and he’s right.

You also have to question if it’s really such a good deal from the Treasury’s perspective. Its hands are tied to some extent, forced to compromise to secure Switzerland’s co-operation, but the £5 billion it expects to rake in from the arrangement is a tiny fraction of the amount it would collect if the money stashed away in Switzerland was declared and taxed in the way expected of ordinary taxpayers. And with the deal not coming into force until 2013, Swiss account holders have plenty of time to take further evasive action.

Some are likely to look towards Liechtenstein, where they can take advantage of an even more generous HMRC deal whereby they face penalties of up to just 10 per cent of the tax owed if they come forward.

So what is Chancellor George Osborne’s next trick? Looks like it may be a repeal of the 50 per cent tax rate.

We’re all in this together, don’t forget.

Our beloved high street banks have an unhealthy habit of regularly acting in a way that encapsulates all that is awry about their attitude to their long-suffering customers. Last week a Scotsman reader helpfully sent me a copy of a letter he had received from RBS, accompanied by suitably acerbic remarks about the bank.

The letter explained that as RBS is “committed to becoming Scotland’s most helpful bank” and because it wants to ensure customers get the “same personal attention over the phone” that they’d get in their local branch, it would be diverting all calls to branches to a call centre.

So in the name of being more helpful RBS has decided you can no longer call your branch directly. It’s the way they tell ’em.

Customers are more likely to be riled by the tone of the letter than the actual change being announced, because it takes them for idiots. An honest approach, which doesn’t attempt to pass the move off as the latest exciting development in the bank’s quest to discover the holy grail of customer service, would be easier to stomach.

Customer service is about providing what people want and need, not telling them they’re getting what they want and need without ever delivering it. But until financial services companies stop treating their customers like children that believe everything they’re told, we can’t expect much improvement.