Whilst 'The Boy' George, (aka Gideon) was delivering his budget yesterday, and announcing the reduction of the 50p rate to 45p, inconspicuous by his abcense was Dave Hartnett, Permanent Secretary for Tax, HM Revenue & Customs.On Tuesday he was not in Whitehall helping with The Budget. He was in Switzerland, signing an agreement with Mr Osborne's approval.
The agreement will allow Swiss Banks to collect tax from UK citizens who have accounts there. It is pretty complicated, but as we understand it, if a company or person puts income in a Swiss bank account and declares it to HMRC, they no longer have an obligation to pay tax on it here.
Instead The Swiss Banks will tax it at Swiss tax rates which is 13.2% for earnings over 166k euros, and then pass the revenue to HMRC(hopefully). Now you might say, "Well at least they are declaring it" but apparently citizens by law have to declare Swiss Bank accounts so those who don't are criminals already.
But this is a clear tax dodge for those rich enough to exploit it and many are doing so, with major British companies having set up 'headquarters' in small flats in Switzerland. Now we know why!
All in this together? Give us a break.
It is interesting to note that Swiss income tax rates for 2012 are:
Tax Bracket (yearly earnings)
Tax Rate (%)
€0 - €13,600 0.00%
€13,600 - €29,800 0.77%
€29,800 - €39,000 0.88%
€39,000 - €52,000 2.64%
€52,000 - €68,300 2.97%
€68,300 - €73,600 5.94%
€73,600 - €97,700 6.60%
€97,700 - €127,100 8.80%
€127,100 - €166,200 11.00%
€166,200 and up 13.20%
