The UK signed an opaque and devious deal with Switzerland regarding the assets of UK taxpayers in Swiss banks, allowing them to keep their wealth secret while paying a withholding tax. It contained carefully flagged escape routes from even the withholding tax, such as via discretionary trusts.
The real purpose of the deal appeared to be to undermine support for the strengthening of the EU Savings Tax Directive to improve transparency.
This report estimated the revenues that would be raised by this — plausibly, negative effective revenues — and events subsequently proved fairly close to the estimates.
Key findings
- A bilateral deal between the UK and Switzerland in 2011 to withhold some taxes on UK assets in Swiss banks instead of creating transparency
- This is a highly opaque deal protecting UK criminals with loopholes are explicitly carved into the deal to help evaders
- The deal may end up being revenue-negative for the UK
Key recommendations
- The UK should repeal and repudiate the deal
Additional resources
https://www.theguardian.com/business/2011/oct/25/swiss-tax-deal-uk