Tax campaigners have called for the ‘immediate cancellation’ of the UK government’s tax agreement with Switzerland. The Tax Justice Network published details of ten ‘escape routes’ in the agreement, which is designed to tackle evasion by British residents using secret Swiss bank acccounts.
Responding to the TJN report published today, HMRC said the agreement signed earlier this month ‘will deliver billions of pounds to the UK that would otherwise have been lost’.
The TJN claimed that the world now faced a ‘grave risk’ that similar agreements could ‘spread like a cancer through the global financial system’.
TJN Director John Christensen said: ‘It’s hard to see how the British public will benefit in any way from this flawed agreement. Worse, it will reverse years of progress made by the EU towards tackling tax evasion through automatic information exchange. It is impossible to see how the HMRC can describe this deal as being in Britain’s interests.’
Many countries are now considering similar agreements, said Nicholas Shaxson, author of Treasure Islands – Tax havens and the Men who Stole the World, who prepared the group’s 29-page analysis.
‘They are either tax havens that want to copy Switzerland, or victims of tax evasion that want to copy the UK. This deal has to be killed,’ he said.
The TJN estimated that the annual withholding tax payable to the UK under the agreement would be lower than that payable under an existing agreement negotiated by the European Commission in the context of the EU Savings Tax Directive. But HMRC said the new agreement would deliver ‘significantly more’ than the EC agreement.
An HMRC spokesman added that anyone who takes money out of Switzerland rather than paying the tax ‘would be taking a big risk, facing penalties that wipe out the advantage of going offshore in the first place, and potential criminal prosecution’.
The agreement would not prevent HMRC’s use of information obtained outside formal information exchange agreements, he said.
Tax campaigners have called for the ‘immediate cancellation’ of the UK government’s tax agreement with Switzerland. The Tax Justice Network published details of ten ‘escape routes’ in the agreement, which is designed to tackle evasion by British residents using secret Swiss bank acccounts.
Responding to the TJN report published today, HMRC said the agreement signed earlier this month ‘will deliver billions of pounds to the UK that would otherwise have been lost’.
The TJN claimed that the world now faced a ‘grave risk’ that similar agreements could ‘spread like a cancer through the global financial system’.
TJN Director John Christensen said: ‘It’s hard to see how the British public will benefit in any way from this flawed agreement. Worse, it will reverse years of progress made by the EU towards tackling tax evasion through automatic information exchange. It is impossible to see how the HMRC can describe this deal as being in Britain’s interests.’
Many countries are now considering similar agreements, said Nicholas Shaxson, author of Treasure Islands – Tax havens and the Men who Stole the World, who prepared the group’s 29-page analysis.
‘They are either tax havens that want to copy Switzerland, or victims of tax evasion that want to copy the UK. This deal has to be killed,’ he said.
The TJN estimated that the annual withholding tax payable to the UK under the agreement would be lower than that payable under an existing agreement negotiated by the European Commission in the context of the EU Savings Tax Directive. But HMRC said the new agreement would deliver ‘significantly more’ than the EC agreement.
An HMRC spokesman added that anyone who takes money out of Switzerland rather than paying the tax ‘would be taking a big risk, facing penalties that wipe out the advantage of going offshore in the first place, and potential criminal prosecution’.
The agreement would not prevent HMRC’s use of information obtained outside formal information exchange agreements, he said.
