HMRC’s Swiss tax deal ‘unrealistic’

Today’s tax deal between the UK and Switzerland, designed to recoup £7bn from Brits with funds in Swiss bank accounts, is “unrealistic”, according to accountants Baker Tilly.

The deal, which will deduct a one-off payment of between 19% and 34% from offending accounts, is "an excellent agreement", according to Exchequer Secretary David Gauke.

"Working with the Swiss Government we have delivered a highly effective solution which will benefit both countries and recover billions of pounds of unpaid tax for the UK," he said.

But Mike Down, from Baker Tilly's tax risk and investigation management division, said the deal would hit taxpayers who may have legitimately not disclosed Swiss accounts.

"We have become increasingly concerned that HM Revenue and Customs (HMRC) has selected too many cases for Civil Investigation of Fraud (CIF) in which no fraud is in fact found to be present," he said.

And he questioned HMRC's claim that 80% of UK residents with a Swiss investment are not paying all their taxes.

The deal also contains an "anti-abuse clause", which HMRC hopes will prevent the promotion of avoidance by Swiss banks.

A programme of audits, overseen by a new UK-Swiss joint commission, will ensure that banks are complying with regulation.

Last week, MP Angela Eagle branded the one-off deal "a disgrace". Not seeking to properly target offenders was ethically and morally wrong, she said.