The Government is treating illegal super-rich tax evaders more leniently than honest workers who play by the rules, the Treasury Select Committee (TSC) has said in a damning report.
George Osborne struck a landmark deal
with Switzerland last year under which the Swiss authorities would
collect tax on UK funds held in the country on behalf of HMRC. Photo: Geoff pugh/ALAMY
8:23PM GMT 08 Mar 2012
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George Osborne struck a landmark deal with Switzerland last year under which
the Swiss authorities would collect tax on UK funds held in the country on
behalf of HM Revenue & Customs. The deal allowed Switzerland to preserve
its tradition of banking secrecy by letting individuals remain anonymous but
stopping them using Swiss banks for tax evasion.
The agreement, expected to raise £5bn between 2013 and 2015, was unveiled to
much fanfare. But in a report published today, the TSC attacked it for
seeming "to reward those who have deliberately avoided tax over those
who have not".
The report argued that the 48pc top rate at which tax would be levied under
the Swiss deal is lower than the 50pc rate they would face if their assets
were fully disclosed or in the UK.
"We are concerned that the levies on Swiss bank accounts will result in
those who have sought to avoid tax by concealing their assets offshore
receiving more favourable tax treatment than those who were compliant in the
first place," the report said.
"If there are to be similar agreements in future with other
jurisdictions, the Government should seek agreement for the same effective
tax rates that apply to UK taxpayers."
The TSC also expressed concern about the date the "amnesty" will
come into force, which is not until next year as it would give "tax
evaders a chance to move their assets". HMRC officials acknowledged the
risk but explained that "the Swiss have to build a system to make this
happen".
The TSC welcomed the principle of "reducing opportunities for individuals to avoid tax by concealing assets offshore". Under the deal, the Swiss will impose a one-off levy of up to 34pc on the estimated £125bn of UK funds held in Switzerland. The contents of the accounts would then be subject to annual withholding tax of up to 48pc on earned income.
The TSC welcomed the principle of "reducing opportunities for individuals to avoid tax by concealing assets offshore". Under the deal, the Swiss will impose a one-off levy of up to 34pc on the estimated £125bn of UK funds held in Switzerland. The contents of the accounts would then be subject to annual withholding tax of up to 48pc on earned income.
