Swiss banks tax evasion deal agreed
The Government has reached a "historic" agreement with Switzerland to crack down on offshore tax evasion, it has been announced.
It is understood that the deal to stamp out abuse of Swiss banking secrecy will generate £5 billion for the Treasury from 2013.
Chancellor George Osborne declared that it spelled the end of the days when it was "easy to stash the profits of tax evasion in Switzerland".
Under the terms of the agreement, existing funds held by UK taxpayers in Switzerland will be subject to a one-off deduction of between 19% and 34% to settle past tax liabilities, leaving those who have already paid their taxes unaffected.
And as a gesture of good faith, Swiss banks will make an up-front payment from Switzerland to Britain of 500 million Swiss francs (£384 million), the Treasury said.
UK residents with funds in Swiss bank accounts will also be levied with a new withholding tax - a tax deducted from income at the source - of 48% on investment income and 27% on gains.
This will be accompanied by a new information-sharing initiative designed to make it easier for HM Revenue and Customs (HMRC) to find out about Swiss accounts held by UK taxpayers.
The new charges will not apply if the taxpayer authorises a full disclosure of their affairs to HMRC, the Treasury added.
Mr Osborne said: "Tax evasion is wrong at the best of times, but in economic circumstances like this it means that hard-pressed, law-abiding taxpayers are forced to pay even more.
"That is why this coalition Government made it a priority to go after those who don't pay their fair share. We will be as tough on the richest who evade tax as on those who cheat on benefits. The days when it was easy to stash the profits of tax evasion in Switzerland are over."