Thousands of higher rate taxpayers, who pay 50% tax on their income in the UK, will be allowed to keep their secret accounts in Zurich and Geneva and pay a low tax rate after the Treasury failed to secure agreement on sharing bank details.
Proposals to make the deal retrospective were also rejected by the Swiss authorities, saving further large sums for wealthy UK residents.
The Treasury said earlier this week that the agreement, due to be hammered out in the new year, would bring in extra revenues currently held in Swiss bank accounts beyond the reach of the UK exchequer. It is understood Treasury minister David Gauke, who will lead the negotiations, expects to raise more than £1bn.
But critics of the move said it amounted to a capitulation by the UK and showed the government was preparing to "let wealthy investors off the hook".
And as it noted:
Richard Murphy, head of Tax Research, said: "No indication is given as to how these accounts are to be regularised. Indeed, there is no prospect they can be because the £40bn or so of evaded assets will not have to be declared by name by the Swiss. In that case there is no prospect of UK interest or penalties being charged.
I sincerely hope I am not alone
Swiss banking secrecy was created to facilitate tax evasion. The nonsense that it was introduced to help the Jews is a blatant untruth. Swiss banking secrecy was created and is still maintained to support the crime of tax evasion.
As a consequence of supporting the crime of tax evasion the Swiss has also facilitated many other crimes: there can be no doubt that the proceeds of crime, of corruption, of drug and human trafficking and much more will have been hidden from view.
That is what banking secrecy aims to do. Ignore all the arguments about privacy: there is all the secrecy anyone needs in the UK banking system. Banking secrecy Swiss style is about denying authorities the information they need to ensure the rule of law is upheld, nothing more or less. It is not about the reasonable privacy many desire for their financial affairs.
And it’s also about undermining fair markets.
In supporting this abuse, as the UK government is now doing, it shows itself to a) support tax evasion b) support the abuse to markets that banking secrecy facilitates.
What a sorry indictment of the ConDems.