The tax deal between the Uk and Switzerland initialed today is reported to:
retrospectively tax existing banking relationships in Switzerland, persons resident in the UK should be given one chance to make an anonymous lump-sum tax payment. The size of this tax burden will vary from between 19% to 34% of the assets in question, and will be determined based on the duration of the client relationship as well as the initial and final amount of the capital. Instead of such a payment, those affected should also have the possibility of disclosing their banking relationship in Switzerland to the British authorities.
To say that this is a quite extraordinary act by the UK government massively understates the irresponsibilioty of what they have agreed.
The UK is apparently going to accept settlement for past tax at around 30% of the assets held in a Swiss account. That might be reasonable if the funds placed in Switzerland had been taxed in the UK before being deposited in Switzerland and it was only the income on those funds that had been evaded since then. But what we know for sure is that most money held in Switzerland got their illicitly - it was not taxed before its arrival in the Alps. It's tax evaded money.
As a result we would now expect 40% tax (at least) on the capital in all these accounts in Switzerland as a matter of course plus a 100% penalty that might reasonably be charged in a case of deliberate tax evasion (meaning in total 80% of the capital balance should be paid to settle the tax originally evaded) and then there is of course interest due on the late payment plus tax due on the income earned since. Nothing less than 100% is due on these balances - wiping them out of course - and anything else is a scandalous underpayment.
But George Osborne is not going to demand that sum. He's instead going to accept a tiny part of what is owing.
So at a time when the government is demanding respect for the law, high moral standards and responsibility by all in society one group of criminals - those who have deliberately and knowingly broken the law by tax evading in Switzerland - are going to be let off without paying anything like what they owe even in tax, let alone in penalties and interest. What is more, instead of these people being brought before an all night court sitting to make sure justice is done with names and addresses being published for all to see anonymity is instead being guaranteed to those criminals so they can still held their heads up high in polite society.
It's a sickening dual standard at the time when the government should be taking the moral lead in showing we're all in this together. And it shows just exactly what the government thinks - which is that there really is a dual standard in the UK's law. There is one law for the rich and one for everyone else, and this government is pleased to reinforce the fact.
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[…] a sickening dimension to today’s agreement between the UK and Switzerland that is getting to let thousands of wealthy tax criminals off the hook – without them ever […]
I agree with you that this arrangement is not perfect. However:
1) Was anything better at all possible ? Any further disclosures would have required the compliance of the Swiss, which didn’t seem to be forthcoming. Germany didn’t do any better with its recent agreement.
2) Far from saying Osborne and Cameron have let these tax evaders off, surely they should be congratulated on getting more out of the evaders than 13 years of Gordon Brown ever managed.
3) This doesn’t mean that HMRC won’t still be able to investigate the original source of these Swiss deposits and charge cgt and fines accordingly.
4) Do we actually know that most of the money deposited in Switzerland got their “illicitly”. Surely a significant portion came from UK ex-pats working overseas, their companies paying the relevant taxes for them, and their net salaries being paid into an offshore account.
So, so wrong
Brown helped deliver the European Union Savings Tax Directive
And it’s on the table for upgrade now – a process destroyed by Osborne and Cameron – who clearly want to help criminals – nothjing else explains their behaviour
And no HMRC can’t investigate – the deal is done
This is a disastrous deal for the UK
I’m not sure why we didn’t invite them to loot the Treasury whilst they were at it – because that’s what they seem to have done
You are alone in thinking that any better agreement could have been signed. There is just no global political will to force the Swiss banks to give up bank secrecy. And no prospect of the Swiss banks giving this up, or of the Swiss government or popular mandate within Switzerland forcing them to give it up.
HMRC can still investigate anyone they think holds assets illicitly. This doesn’t “let anyone off”. The original source of these assets has not been legitimatised. As I mention elsewhere the HMRC can still ask for details of 500 persons per year.
I don’t believe the evaders with substantial sums are going to be willing to play the odds that they won’t be investigated. It is quite a stress to have always hanging over you. .
Absolute nonsense
The will exists in the EU
The deal was on its way
The UK has mugged it
And yes this is all about deliberately letting people off – off their criminality, off their tax, and off their duty to declare their income
How dare you say otherwise
I can only presume you are a promoter of crime. No one else could argue as you do
The British and German Treasuries evidently thought this was the best deal that was possible.Your suggestion that this is just Osborne letting off rich criminals just doesn’t fit with the evidence. No other serious person thinks this deal is disastrous. It is far from perfect, but short of economic sanctions against Switzerland I fail to see Switzerland agreeing to giving up bank secrecy. You have a lot of faith that an EU deal was in the offing. I can’t find any evidence that this was at all likely.
And why does the current arrangement prevent the EU from pursuing further sanctions against Swiss tax evaders. Why can’t this be seen as but one large step in ending Swiss bank secrecy.
“No other serious person”?
You mean “no tax fraudster”?
I assure you there will be much objection to tis deal – not least in parliament
And read my latest blog – I do suggest that this is a deliberate move to support tax evasion by UK gov’t
No doubt you’re delighted
But then that’s because there is one law for the rich, another for protestors and another for kids who pick upo £3.25 of water
I have no doubt which you are
Sorry, but you are being obtuse if you think that supporting this agreement as the best possible agreement under the circumstances is an approval of criminal tax dodging. It is getting £5bn out of the rich that hasn’t been touched in previous years and doesn’t do anything to prevent criminal prosecutions of these tax evaders in the future.
You still haven’t explained why if this is a deliberate move to support tax evasion by the Tories then why has Germany also been negotiating independently of the wider EU Savings Tax Directive negotiations.
Read Denis McShane’s (Labour MP, very pro-EU, no fan of Osborne or tax evasion) comment on the Spectator Coffee House blog today and he agrees that this is the best deal possible and that wider EU measures would never be implemented.
I suspect I know more the EU deal than he does then
The rest I have already explained
According to the BBC
“The UK authorities will also have the right to request the banking details of 500 UK individuals a year for further investigation.”
Isn’t this significant ? If you are a Swiss bank account holder who has been evading tax would you take the risk of being one of the 500 investigated annually and found out, prosecuted and jailed.
Surely this is a huge incentive to own up now, pay the full tax, plus fine and interest, and think yourself lucky.
But that’s for the future
So we’ve agreed a quota of the number of cases we may investigate
In other words the odds of getting away with things increased
Of course. Leona Helmsley was quite correct to say that only little people pay taxes. It’s always been that way. Lately, they’re so confident they’re untouchable they aren’t even bothering to hide it any more, that’s all that’s changing. The formerly covert is becoming overt.
This will precipitate complete social breakdown because if laws are only selectively enforeced then you can’t really expect anyone to give them much consideration.
BB
Dude, a least use a spelling checker…
I do
And you see if you can write 6,000 words a day and not make mistakes
Seriously?
You read an article which makes severely critical points of one of the biggest, most controversial decisions in UK tax policing policy since WWII and the most notable aspect you can take from it is that there was a spelling mistake?
Also, I find it staggering that someone can call another out on their spelling whilst calling them “Dude” in the same sentence. His name is right there on screen should you choose to use it.
By any chance, did you get lost on your way to Icanhascheezburger?
[…] one for everyone else, and this government is pleased to reinforce the fact. Cross-posted from the Tax Research UK blog … Tags: David Cameron, Ethics, George Osborne, Swiss, Switzerland, Tax Evasion, UK Tweet /**/ […]
Mr Richard Murphy is certainly not alone with his perception and thoughtful analysis of this scam of a gimmick, because that is all it is. @ Nick you obviously don’t live in the same world as the majority of decent hard working people who live by the rules and pay their taxes. The Conservatives are a political party that look after the rich by making them richer off the hard work, sweat and blood of the working classes. There is a clue in the title of their political party. They want to ‘conserve’ the polar society they have been at the heart of for so long. Which, incidentally, was won with the blood of peasants and serfs; in other words today’s working classes.
Citing the Treasury release: “The new charges [the withholding on Income and Capital Gains] will not apply if the [UK] taxpayer authorises a full disclosure of their affairs to HMRC”. In other words, HMRC are seeking to keep the money there in Switzerland, where they can now find it, rather than elsewhere, where they might not.
No – that’s not true
That just means if they agree to their name and address going to HMRC they do not need to suffer withholding
Since none of the refund will take place until 2013, won’t those people who evade their UK taxes just find another off-shore tax haven to squirrel away their money before that date?
Since none of the money comes here until 2013 won’t the tax evaders find some other tax haven to squirrel away therir money?
Of course
And we’re letting them do so
Singapore is the destination of choice
[…] which lets British tax dodgers legally avoid their dues by squirrelling billions in Switzerland: Cameron and Osborne let thousands of proven criminals off all charges – anonymously You either think letting tax criminals off whilst only paying a small part of the tax they owe is […]