Tax Disputes & Investigations

UK-Swiss Tax Agreement

On 24 August 2011, the UK Government announced a historic deal with Switzerland to tackle tax evasion. This Agreement with Switzerland is the latest step in HM Revenue & Customs' (HMRC) crackdown on offshore tax evasion, which includes:-

• The Liechtenstein Disclosure Facility;
• A new dedicated team of investigators to catch those hiding money offshore; and
• Ongoing work to put in place information sharing arrangements with other countries.

Under the terms of the UK-Swiss Agreement, existing untaxed funds held by UK taxpayers in Switzerland will be subject to a one-off deduction in 2013 (provided the account was open on 31 December 2010 and is still open on 31 May 2013). The deduction will be between 19% and 34% and will anonymously settle any Income Tax, Capital Gains Tax, Inheritance Tax and VAT liabilities that might be due. The deduction will not be applied if the account holder instructs the bank to disclose details of the account to HMRC. Following that disclosure, HMRC will seek unpaid taxes with relevant interest and financial penalties.

As a gesture of good faith, Swiss banks will make an up-front payment of CHF 500million.

From 2013, a withholding tax will applied to ensure future tax compliance by UK residents holding funds/assets in Switzerland. Again, the withholding tax will not apply if the account holder authorises disclosure of the income and gains to HMRC and pays any associated taxes in the UK.

The UK-Swiss Agreement is due to come into force at the beginning of 2013. Before then, however, HMRC's attack on offshore account holders with untaxed monies will continue and if HMRC starts an investigation into your affairs before the Agreement comes into force (or before you have made a disclosure) then you could end up paying significantly more to HMRC as part of any settlement. Taxpayers are advised to regularise their affairs 'sooner rather than later'.

The Liechtenstein Disclosure Facility is unaffected by this proposed Agreement.

Please see our FAQs on the UK-Swiss Agreement for further information.

Is now the time to disclose offshore accounts?

Yes. By approaching HMRC (rather than risking HMRC initiating an investigation), taxpayers can help reduce the potential financial penalties that could be charged and best protect themselves from potential prosecution. The risk of prosecution is real. HMRC believes that criminal charges/trials have a strong deterrent effect on those who may have evaded tax (or those who are thinking about evading tax) and is significantly increasing the number of direct tax prosecutions it undertakes in the years up to 2015.

HMRC is determined to eradicate offshore tax evasion and offshore 'tax havens' are facing increasing political pressure to help the UK and other governments to solve the problem.

From 6 April 2011, HMRC has new powers to charge penalties for offshore tax evasion:-

• Up to a 200% penalty for tax evaders using jurisdictions that do not share tax information with the UK; and
• Up to a 150% penalty for tax evaders using jurisdictions that only exchange information with the UK on request.

The potential 100% penalty for tax evasion using a territory that automatically exchanges information with the UK remains unchanged.

How can OneE TDI help?

If you know or suspect that you need to disclose undeclared income, profits and/or gains to HMRC (whether they arise in the UK or offshore) you should seek specialist advice from OneE TDI before doing so. The management of the disclosure process and the way in which the relevant facts are presented to HMRC are key to achieving maximum penalty mitigation and protecting you from further enquiry by HMRC. In addition, you can also protect yourself from being 'named and shamed' by HMRC as part of its 'Publishing the Names of Deliberate Defaulters' programme.

At the core of OneE TDI is a highly experienced team specialising in all areas of tax disputes and investigations. We offer confidential, non-judgemental and invaluable advice to best defend our clients. We have a proven track record in managing all contentious tax matters and provide an outstanding, cost-effective service which results in tangible benefits and savings for our clients. We have up-to-date knowledge of all HMRC campaigns and disclosure facilities and are able to secure the best available terms for our clients.

Putting it simply, we take control of and manage all issues relating to tax disputes and investigations so that our clients can get on with their life and their business. What price peace of mind?

Please see the Testimonials kindly provided by our clients (or their accountants or lawyers), which confirm our levels of client service.

How can I contact OneE TDI?

If you would like a free, confidential, no obligation discussion with us please contact either Gary Rowson or Mark Taylor on 0800 652 6156 or complete and submit the online form below.

Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters.

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