Britain’s new Swiss deal chimes with tax avoidance clamp-down

BRITAIN yesterday signed an agreement with Switzerland to begin taxing funds held by wealthy British clients of Swiss banks from next January, after slightly altering the terms of a withholding tax deal to appease Brussels.

The deal coincides with George Osborne’s Budget, which is expected to include measures to clamp down on tax avoidance of several hues.

The EU backed down from its opposition to the British deal two weeks ago after Switzerland agreed to bring the pact into line with EU rules.

Interest income will now be subject to an existing EU-Swiss agreement of 35 per cent, plus an additional 13 per cent to ensure tax compliance, which adds up to an unchanged rate of 48 per cent tax.