The UK is to use information received under a tax treaty to target UK residents and organizations holding Swiss bank accounts who may have fallen short on income tax reporting requirements.
Information received last year under an unspecified tax treaty will enable HM Revenue and Customs (HMRC) to crackdown on those who may not have reported all their income and gains. The information gathered revealed that more than 6,000 individuals, companies, trusts and other bodies held accounts and investments with a bank in Geneva.
HMRC will now begin writing to those individuals and organizations concerned. They will be offered a window of opportunity to contact HMRC and disclose all their tax liabilities. If they fail to come forward, HMRC will investigate their affairs. This could include a criminal investigation or result in penalties of up to 200%.
HMRC has already begun criminal and serious fraud investigations into more than 500 individuals and organizations holding these accounts. In addition, HMRC says that many others have taken advantage of HMRC’s Liechtenstein Disclosure Facility (LDF). The LDF allows people with unpaid tax linked to investments or assets in Liechtenstein to settle their tax liability under a special arrangement, and will run until March 31, 2015.
The work will be led by HMRC’s recently established Offshore Co-ordination Unit, due to become fully operational next month.
Commenting on the initiative, Exchequer Secretary to the Treasury, David Gauke, said: “The government has shown its commitment to closing the tax gap by making an additional GBP917m available to HMRC to tackle evasion, avoidance and fraud. This will fund the new Offshore Co-ordination Unit, and its specialist teams, which will drive forward this work.”
HMRC’s Permanent Secretary for Tax, Dave Hartnett, added: “This is not an amnesty. There are no special rates of penalty or interest for those who come forward voluntarily. This is an opportunity for those who have made errors in past returns to correct them.”
The UK recently signed a banking deal with the Swiss authorities, which HMRC believes will enable it to collect billions from 2013 onwards. The agreement will permit UK residents to retrospectively pay tax on existing bank relationships in Switzerland, either by making a one-off tax payment or by making a full disclosure of their banking affairs to UK authorities. Tax will be charged at a rate between 19% and 34%.
The agreement also provides for a final withholding tax to be levied on any future investment income and capital gains of UK bank clients in Switzerland. A 48% tax will be charged on investment income, with 27% levied on capital gains.
Information received last year under an unspecified tax treaty will enable HM Revenue and Customs (HMRC) to crackdown on those who may not have reported all their income and gains. The information gathered revealed that more than 6,000 individuals, companies, trusts and other bodies held accounts and investments with a bank in Geneva.
HMRC will now begin writing to those individuals and organizations concerned. They will be offered a window of opportunity to contact HMRC and disclose all their tax liabilities. If they fail to come forward, HMRC will investigate their affairs. This could include a criminal investigation or result in penalties of up to 200%.
HMRC has already begun criminal and serious fraud investigations into more than 500 individuals and organizations holding these accounts. In addition, HMRC says that many others have taken advantage of HMRC’s Liechtenstein Disclosure Facility (LDF). The LDF allows people with unpaid tax linked to investments or assets in Liechtenstein to settle their tax liability under a special arrangement, and will run until March 31, 2015.
The work will be led by HMRC’s recently established Offshore Co-ordination Unit, due to become fully operational next month.
Commenting on the initiative, Exchequer Secretary to the Treasury, David Gauke, said: “The government has shown its commitment to closing the tax gap by making an additional GBP917m available to HMRC to tackle evasion, avoidance and fraud. This will fund the new Offshore Co-ordination Unit, and its specialist teams, which will drive forward this work.”
HMRC’s Permanent Secretary for Tax, Dave Hartnett, added: “This is not an amnesty. There are no special rates of penalty or interest for those who come forward voluntarily. This is an opportunity for those who have made errors in past returns to correct them.”
The UK recently signed a banking deal with the Swiss authorities, which HMRC believes will enable it to collect billions from 2013 onwards. The agreement will permit UK residents to retrospectively pay tax on existing bank relationships in Switzerland, either by making a one-off tax payment or by making a full disclosure of their banking affairs to UK authorities. Tax will be charged at a rate between 19% and 34%.
The agreement also provides for a final withholding tax to be levied on any future investment income and capital gains of UK bank clients in Switzerland. A 48% tax will be charged on investment income, with 27% levied on capital gains.
