Library
08 December 2011
UK TAX AVOIDANCE INITIATIVES
The Treasury Chief Secretary, Danny Alexander, announced at the Liberal Democratic conference in September that the HM Revenue and Customs ( “ HMRC ” ) is to establish an “affluence team” to focus on tax avoidance by the wealthy – i.e. the estimated 350,000 people with a personal wealth over £2.5m. It is understood that HMRC will recruit an additional 2,500 staff as a result.
The UK/Switzerland Tax Cooperation Agreement signed in October produced a few interesting and unexpected implications for UK taxpayers. From 2013, after a one-off withholding, Swiss Banks will annually withhold and pay over to HMRC 48% from investment income, 40% from dividends and 27% from capital gains realized by UK taxpayers. The individual account details will not be revealed to the HMRC, unless requested by the taxpayer. Bill Dodwell, head of tax policy at Deloitte, states in the October edition of Accountancy that “Dubai”, Singapore and Hong Kong are the most likely alternative tax heavens and urges the international community to put pressure on those jurisdictions for similar agreements to be put in place”.