£40bn held in Swiss bank accounts by UK taxpayers

Man and woman silhouette The government admits it may not be able to pin down who owns all the money in Swiss banks

An estimated £40bn is being held in Swiss bank accounts by UK taxpayers.

The estimate, the first to be published, is contained in the documents accompanying the Autumn Statement.

A breakthrough tax agreement with the Swiss government comes into force on 1 January 2013.

It is hoped that this will flush out £5.3bn in extra tax over the next six years, from UK citizens who have been hiding money in Swiss bank accounts.

"I am staggered at the sums, it is a huge amount of money, absolutely enormous," said Ronnie Ludwig at accountants Saffery Champness.

"It makes me wonder how much is stashed away in other tax havens."

'Significant step forward'

The deal with the Swiss government was first struck in August 2011.

The country has, until recently, been one of the world's top tax havens with a long tradition of total secrecy for its banks' customers.

This has crumbled under international pressure in the past two years.

Autumn Statement Documents

PDF download Autumn Statement 2012[2,800 k]

Most computers will open PDF documents automatically, but you may need Adobe Reader

The UK's deal will see the Swiss government make a payment of half a billion Swiss francs, to cover past unpaid taxes due to the UK.

"This is the largest tax evasion settlement in UK history, marking a significant step forward in the battle against those who seek to evade UK tax," said the Treasury.

In addition, on behalf of the UK tax authorities, the Swiss government will collect:

  • A one-off levy on existing Swiss assets owned by UK residents, worth between 21% and 41% of the assets
  • A withholding tax on future income and gains, at rates ranging from 27% to 43%
  • A 40% per cent inheritance tax on Swiss assets for UK investors.

The UK government admits it may not be able to pin down who, exactly, owns all the money in Swiss banks, and also expects some of the assets to be moved.

So it thinks the amount that will be taxed will in fact be £25bn.

"An adjustment has also been made to account for identification failure," the Treasury admits.

There is, however, a word of warning: the deal may require a referendum of the Swiss people to ratify it.

"The final stage of the ratification process is expected to be concluded shortly, but there remains a possibility that the Swiss government will have to hold a referendum on the agreement," says the Treasury.

"This is therefore a significant fiscal risk to the forecast."

The Treasury also added: "The estimated revenue raised by this measure is also highly uncertain as there is little hard information about the value of UK individuals' financial assets in Switzerland, and how these individuals will respond to the policy."

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories


Features & Analysis

  • Cartoon of women chatting on the metroChat wagon

    The interesting things you hear in a women-only carriage

  • Replica of a cargo boxSpecial delivery

    The man who posted himself to the other side of the world

  • Music scoreFinal score Watch

    Goodbye to NYC's last classical sheet music shop

  • Former Secretary of State Hillary Rodham Clinton checks her Blackberry from a desk inside a C-17 military plane upon her departure from Malta, in the Mediterranean Sea, bound for Tripoli, Libya'Emailgate'

    Hillary gets a taste of scrutiny that lies ahead

Elsewhere on the BBC

  • Audi R8Best in show

    BBC Autos takes a look at 10 of the most eye-catching new cars at the 2015 Geneva motor show


  • A cyborg cockroachClick Watch

    The cyborg cockroach – why has a computer been attached to this insect’s nervous system?

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.