Under the original agreement, Swiss banks would charge a withholding tax of between 19% and 34% on the bank accounts of Britons and transfer the money directly to the Treasury, without revealing the identity of account holders. The tax is due to start in May 2013.
However, the German tax authorities, who have an almost identical agreement with the Swiss government, have recently negotiated a rise in the withholding tax rates to between 21% and 41% for German residents.
John Cassidy, tax investigation and dispute resolution partner at accountancy firm PKF, said: “I’d be surprised if the UK authorities didn’t increase the withholding tax rates to match the recently renegotiated German levels. The government wants to claw back as much tax as it can from this deal in the current political and economic environment.”
The changes to the Swiss deal are likely to make a tax disclosure facility with Liechtenstein a more financially attractive option for UK taxpayers with money hidden offshore, experts agreed.
The Treasury has not disclosed how much it hopes to raise through the Swiss tax deal but a source familiar with the agreement told AccountingWEB that it could raise more than £5bn a year for the UK government.