Saturday, 18 December 2010
One less tax haven to stash those billions in Liechtenstein
On the face of it, the Treasury’s deal with Liechtenstein is a coup. The Alpine principality is in the premier league of the world’s tax havens. Monaco may be flashier and sunnier, Jersey and Guernsey may be close to home, but for sheer tight-lipped secrecy, Liechtenstein has had few equals.
Hundreds of billions of pounds, euros and dollars are thought to be squirrelled away there. If, as the Treasury claims, the deal will force 5,000 Brits to come clean on £2 billion to £3 billion of secret savings, this is a great result. The proof will be whether the threat of account closure persuades culprits to come forward.
They face relatively modest penalties. The Revenue plans to charge only 10 per cent on dodged tax, and only for the past ten years. These are rather more generous terms than will be offered to those with undeclared offshore accounts at 300 banks who are also in the Revenue’s sights. This could affect an estimated 500,000 people and the Revenue thinks it could raise £500 million over the next four years. Honest taxpayers may resent the leniency being offered to dodgers.
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