Do you have a Swiss Bank Account?

I have today received our first letter from HMRC with regard to one of our clients who has a Swiss Bank Account.

For decades, Swiss banking laws have provided complete secrecy for foreigners individuals that hold bank accounts in Switzerland. The account holders have been able to use the accounts to hide money from the own tax authorities, without even having to pay any tax.

Back in August it was announced that a deal has been struck between the UK & Swiss Tax Authorities. Under the terms of the agreement, the Swiss will tax the bank accounts of the UK taxpayers from 2013 and transfer the money directly to the Treasury. From 2013, the account holders will also face an annual levy of between 27% and 48% on the income from their accounts, depending on whether it has arisen as income or capital.

However it may not be the future that concerns you it may be the past. HMRC can go back to 31 December 2002 to calculate the tax that you should have paid on these accounts. This tax can be paid in a one off lump sum payment taxed at the rates between 19% - 34%. However you need to seek clearance from the Swiss/UK Tax authorities before they agree this payment. The significance of this one off payment means it can cover tax, interest and penalties. Following the payment one will cease to have any outstanding liabilities.

The point is that this letter has triggered an enquiry which means this specific client cannot take advantage of this one off payment and may be liable for greater interest and penalties.

If you have a Swiss Bank Account or know anyone that does it is vital they start planning for this one off payment and disclosure.

This is a complicated area and it is best to get someone to act for you. Please get in touch mitch@ljd.uk.com