Switzerland offshore tax deal criticised by MPs
A tax deal with Switzerland aimed at preventing high-earning expats and big businesses using the country's secretive banking system to avoid paying UK rates has been criticised by MPs (BSE: MPSLTD.BO - news)
In a report on efforts to tackle tax avoidance and evasion, the Commons Treasury sub-committee said they were unhappy that levies on assets were set slightly lower than the 50 per cent top income tax rate in the UK, and that tax evaders had been given time to move their assets elsewhere.
Big businesses also appeared, they said, to have been granted a "more favourable tax treatment".
The deal, expected to generate up to 5 billion for the Treasury, was hailed by Chancellor George Osborne last year as an end to the days when it was easy to "stash the profits of tax evasion" in Switzerland.
As part of the deal, it was agreed that expats with bank accounts in Switzerland would pay between 19 per cent and 34 per cent of their assets to settle past liabilities.
HMRC said the lower rate part of the deal reflected the fact that the money would be received by it earlier in the financial year than it received by the state's take of salaries.
But the sub-committee said: "We do not see why those with offshore bank accounts, who may not currently be fulfilling their tax obligations, should be treated any differently.
"Any perception that those with offshore accounts are paying lower taxes than compliant taxpayers creates a risk that the agreement may encourage taxpayers to seek opportunities to evade tax in the belief that they will be able to reach a favourable settlement in future.
"Also, any perception that some taxpayers are receiving more favourable treatment than others is likely to discourage voluntary compliance."
The committee's report also raised fears that new rules would not apply until 2013.
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Switzerland offshore tax deal criticised by MPs