Osborne’s Swiss tax deal castrates international tax avoidance clampdowns

The government has been crowing about getting tough with tax evaders, with its Swiss tax deal. The Conservative press team tweeted:

“A few years ago, nobody would have anticipated we would conclude an agreement with Switzerland to tackle tax evasion.”

George-Osborne-tax-dodger And, namechecking David Blackburn over at the Coffee House blog, questioned the actions of the last prime Minister:

“David Blackburn asks why the Swiss bank deal wasn’t done sooner. Gordon Brown has some questions to answer”

The answer may be because Brown wanted an international deal that would work for all countries, including the UK, and would not stab poorer states in the back. Christian Aid view the bargain as essentially a betrayal of the developing work, arguing it ‘amounts to collusion with criminality’.

Presently, UK residents can hold anonymous accounts in Switzerland to avoid paying tax. The deal gives these account-holders a choice – either reveal your account and how much is held in it, or the Swiss authorities will tax the account at 19 to 34 per cent, and pass on the proceeds to the UK.

Essentially George Osborne is allowing these individuals to buy their anonymity. But the question remains, why would they want to be anonymous?

Christian Aid Director Loretta Minghella said:

“This deal makes it much less likely that developing countries will ever be able to get the taxes owed to them from those hiding money in tax havens like Switzerland. It is a disgrace.

“Why would anyone rather pay a back tax of 19 to 34 per cent on the money they have hidden in Switzerland than reveal their identity, unless they have done something seriously wrong? And why is the Government letting them get away so lightly?

“The most likely reason is that they have evaded a whole lot more tax than that or been involved in other serious criminal behaviour. This is a bad deal for honest British tax payers and for scores of poor countries around the world.”

Campaigners had hoped for a comprehensive tackling of tax avoidance to be on the agenda for the G20 meeting in November, when governments could have set up an information exchange system between themselves to track down avoiders. This unilateral action by the UK government, and such alleged action by Germany, essentially sells smaller countries without the same clout down the river.

Meanwhile, Richard Murphy of Tax Research UK, also points out that the deal cuts off EU wide action at the knees:

“It’s important to say this deal was not needed. The revised European Union Savings Tax Directive is on the table. Twenty five EU states support it and it has looked very likely recently that compromise with the other two was possible and that Switzerland could have been pulled on board.

“That deal would have ensured we’d have got all the information we needed to demand all the tax due by those who have been criminally evading their tax bills by hiding funds in Swiss banks that have been deliberately and knowingly helping them to do so.

“And I think the UK-Swiss tax deal has been deliberately engineered to scupper that EU wide deal because it would have applied to Jersey, Guernsey, the Isle of Man, Cayman and all other British tax havens that comprise the branch offices of the City of London tax haven. And it would also have extended information exchange to companies and trusts - which would have shattered the tax evasion industries in these British tax havens.”

He has added that the deal not only amounts to a de facto amnesty for tax criminals, but also perpetually putting the UK finance industry at a disadvantage to its Swiss rivals, writing:

“Under this deal, the tax withholding rate to be applied to UK taxpayers holding bank accounts in Switzerland - who do not want details of their affairs disclosed in the UK - will deliberately be less than their UK marginal tax rate.

“The UK government has just handed a perpetual competitive advantage to Swiss banks over UK banks in the markets for savings in the UK. And think just how stupid that is. After all - isn’t every financial adviser now going to be duty bound to tell poeple they can save tax by putting their money in Switzerland?

“I am staggered at how stupid the Treasury have been.”

http://twitter.com/paulstpancras/status/106728551105040384 paulstpancras

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/yH4n8sE reports @DanielElton
http://twitter.com/technicalslip/status/106728596621623296 Technical Slip

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/yH4n8sE reports @DanielElton
http://twitter.com/shamikdas/status/106728665987031040 Shamik Das

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/xZqJ265 reports @DanielElton on @leftfootfwd
http://twitter.com/foldfm/status/106729036738330624 Seth Mowshowitz

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/yH4n8sE reports @DanielElton
http://twitter.com/frances__ryan/status/106729298156720128 frances ryan

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/yH4n8sE reports @DanielElton
http://twitter.com/abparchitects/status/106729655633055744 M Humphrey-Gaskin

RT @leftfootfwd: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/v7Hj4N6 reports @danielelton
http://twitter.com/justmysay/status/106730184585117697 jbw

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/yH4n8sE reports @DanielElton
http://twitter.com/oliver_beatson/status/106730375912501248 Oliver Beatson

RT @leftfootfwd: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/cTNoph5 reports @DanielElton
http://twitter.com/danielelton/status/106732352188846080 Daniel Elton

@christian_aid Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/hUip5hH
http://twitter.com/spsot/status/106732801319116804 Spir.Sotiropoulou

RT @leftfootfwd: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/Y1uw7qW
http://twitter.com/therightarticle/status/106734022432014336 Michael

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns l Left Foot Forward – http://j.mp/q5Qq01
http://twitter.com/worgztheowl/status/106734258747490305 Mark Worgan

RT @leftfootfwd: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/jMyeHPa
http://twitter.com/janet_ewan/status/106734786348986369 janet ewan

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns l Left Foot Forward – http://j.mp/q5Qq01
http://twitter.com/alfredcamp/status/106734900111085568 Alfred Camp

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns l Left Foot Forward – http://j.mp/q5Qq01
http://twitter.com/dafidius/status/106735398822215680 DPWF

"Osborne’s #Swiss #tax deal castrates international tax avoidance clampdowns." Unfortunate if true. http://t.co/a6PRMm7 #Osborne #tax
http://twitter.com/martinmcgrath/status/106735664195846145 Martin McGrath

Osborne's Swiss "bank deal" betrays international efforts to control tax-robbers http://t.co/H3ZgTCT via @leftfootfwd
http://twitter.com/politicalplanet/status/106735980198899712 Political Planet

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: George Osborne’s Swiss tax deal is al… http://t.co/AAPUVfe
http://twitter.com/analiensaturn/status/106738276676800512 alien from saturn

Good info and from the left http://t.co/gjLXsL3
http://twitter.com/jo5hi/status/106740121994399745 Joshi

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/x6oJw3t
http://twitter.com/othertpa/status/106748600339542016 Other TaxPayers Alli

RT @leftfootfwd: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/AvLEwQj reports @DanielElton
http://twitter.com/jblresearch/status/106750497473568768 John Lever

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/TM2pdCK
james

Action is usually better than words.

The sentiment of this article is that we would rather get nothing and hold out for some mythical international agreement. There is no reason why an international agreement could supersede the bilateral arrangements at some point in the future – but that wouldn’t serve the overtly political points that you are trying to make.

As for Murphy – it hasn’t yet occurred to him that prior to this deal financial advisers were advising cash deposits to be lodged in Switzerland in return for zero UK tax. So provided they don’t move their cash somewhere else – this is quite a big step forward.
http://twitter.com/yrotitna/status/106755484106760192 Juan Voet

RT @leftfootfwd: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/AvLEwQj reports @DanielElton
http://twitter.com/karenbellerby/status/106762556022075392 Karen Bellerby

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns l Left Foot Forward – http://j.mp/q5Qq01
Anon E Mouse

I just wish the Guardian Newspaper Group would stop their tax avoidance and since we know they do it I’m surprised the likes of this author read that rag every day.

Hypocrisy and considering the way Gordon Brown rewarded the bankers, city slickers and spivs like no other Prime Minister in history I think the less said about him the better…
http://twitter.com/chrisjords/status/106774052206682112 Chris Jordan

RT @leftfootfwd: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/akTSgeb
Richard

Another straw man argument from the Mickey Mouse who can never discuss the actual issue at hand.
Richard

“There is no reason why an international agreement could supersede the bilateral arrangements at some point in the future”

That’s hogwash. Britain would be considered to be reneging on the deal, making it doubly harder for an international agreement to be struck. Years of careful diplomatic efforts have been undone at the stroke of a pen of one tax avoider.
http://twitter.com/grahphil/status/106775542371594240 Gus P

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns | Left Foot Forward http://t.co/nyw61UD via @addthis
james

@Richard – didn’t Germany sign a deal like this earlier in the month? In which case if bilaterial deals really do end the chance of a multinational deal – then the moment already passed at the stroke of a German pen and the Treasury were wise to sign this deal.

Or does that not fit your narrow objective of bashing the current Government who seem to have done more to tackle tax evaders/avoiders than the last Government ever managed.
http://twitter.com/behavioura/status/106793497159413760 Jane Cross

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns: http://t.co/yH4n8sE reports @DanielElton
http://twitter.com/dratnaike/status/106793742853345280 Dànaidh Ratnaike

Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/MZJq20h @leftfootfwd
Ed’s Talking Balls

‘The sentiment of this article is that we would rather get nothing and hold out for some mythical international agreement.’

Bang on the money.

Not only do actions speak louder than words; billions of pounds are better than none. Pretty hard for Labour to crow on this one. I genuinely don’t believe the public are going to buy it.
Dave Citizen

Clearly we need to start somewhere but are we clear where we are trying to get to eventually?

Let’s have Labour’s, Tory’s and other prospective representatives considered position on what’s acceptable in terms of hiding away (generally dodgy) personal fortunes please.
William

Get a life,Mr. Elton.The top rate of UK tax,not to mention NI,is the problem,not Switzerland.
Mr. Sensible

Headline grabber. Nothing else.
Ed’s Talking Balls

William,

The top rate of tax is punitive, but I regard the 40% rate + NI as the much bigger problem. Since when were those earning £35k p.a. super rich? Confiscating so much of their money is, frankly, a disgrace.

Mr. Sensible,

Yes, I suppose ‘Coalition cracks down on tax evasion to the tune of £5bn’ makes a better headline that ‘Labour moans about tax evasion but does nothing about it’.
Anon E Mouse

Dick – It isn’t Strawman. You’re using the term incorrectly…
http://twitter.com/londoniww/status/107064503883137024 London IWW

#Capitalism: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/PZSPtLT | #Corporatocracy #ClassWar
http://twitter.com/rooftopjaxx/status/107066594894684160 Rooftop Jaxx

#Capitalism: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/PZSPtLT | #Corporatocracy #ClassWar
Leon Wolfson

Quite. It’s downright criminal, and I hope the EU blocks it. I certainly believe that there’s a strong case for charges to be brought over this and will be writing to my MP about it.

And the more said the better, given the Tories called for even less bank regulation and hence you’re highlighting the fact that they would have put this country in a worse position every time you blather here.

Ed – Of course, gotta put more of the tax burden on the poor. Can’t have the rich paying…
http://twitter.com/bankofcat/status/107078870334840833 bankofcat

#Capitalism: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/PZSPtLT | #Corporatocracy #ClassWar
http://twitter.com/gjonesofficial/status/107081737720430592 Gareth Jones

http://t.co/b1lLCJQ Osborne’s Swiss tax deal castrates international tax avoidance clampdowns
http://twitter.com/andhabandar/status/107083226077609986 AndhaBandar

#Capitalism: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/PZSPtLT | #Corporatocracy #ClassWar
http://twitter.com/mugwumpie/status/107125720127512576 Mugwumpie

#Capitalism: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/PZSPtLT | #Corporatocracy #ClassWar
http://twitter.com/davedelagauche/status/107386650090418176 Dave Delagauche

RT @leftfootfwd: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/HKKj6ui
Ed’s Talking Balls

‘Can’t have the rich paying’

I didn’t know you were writing slogans for Labour nowadays, Leon. You’ve neatly summed up your party’s tax policy. Well done.

What was one of Gordon Brown’s hilariously ineffective lines used against the Conservatives, again? Ah, that’s it: ‘the do-nothing party’. Curious, given that that is precisely what Labour did about Swiss tax evasion. Bugger all.

Lastly, I’m impressed by the energy with which you took the bait about tax rates. At least one person in this country believes that someone on £35k p.a. is super rich. I suspect you might be in the minority there.
Leon Wolfson

Funny, it’s almost as if I never supported New Labour, a concept which you still have to deny because you can’t understand what an actual left-winger thinks like.

No, keep defending the rich at all costs, never mind the collateral damage. Never mind the negotiations over years to set up international tax laws, which is a slow process, but one which was near to fruition when the Tories have backstabbed EVERY SINGLE person in this country who isn’t ultra-rich.

SOP for you, of course…
http://twitter.com/modditydodds/status/107626465415270400 Knut Cayce

RT @leftfootfwd: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/QszVaog
http://twitter.com/gabyhinsliff/status/107732169631338496 Gaby Hinsliff

from the Obs: Osborne attacks 'morally repugnant' tax evasion http://t.co/GMF4j21 (NB Swiss deal has its critics, eg http://t.co/dEhzNha)
http://twitter.com/oldsmith/status/107796816501800960 RJ

from the Obs: Osborne attacks 'morally repugnant' tax evasion http://t.co/GMF4j21 (NB Swiss deal has its critics, eg http://t.co/dEhzNha)
http://twitter.com/dianelawrence1/status/108193101566324736 Diane Lawrence

RT @leftfootfwd: Osborne’s Swiss tax deal castrates international tax avoidance clampdowns http://t.co/r7d2wtR
http://www.leftfootforward.org/2011/08/financial-times-george-osborne-swiss-tax-evasion-deal/ FT take apart Osborne’s Swiss tax deal | Left Foot Forward

[...] tax evasion, echoes Left Foot Forward’s criticisms of the deal last Thursday; as Daniel Elton wrote: “Campaigners had hoped for a comprehensive tackling of tax avoidance to be on the agenda for [...]
http://leftcentral.org.uk/2011/09/07/george-osborne-tax-evasion-and-the-failings-of-new-labour/ George Osborne, tax evasion and the failings of New Labour « LeftCentral

[...] Foot Forward argued that the move destroyed international efforts at a treaty. Further to these moral objections to the deal, there seem to be a series of practical leaks that [...]
http://twitter.com/shamikdas/status/124124143477198848 Shamik Das

And on the Swiss tax deal, see @DanielElton's article on why it's not as Osborne's spun it: http://t.co/KQL5m011
http://twitter.com/kropotkin_alias/status/124165215897137152 David Powell

And on the Swiss tax deal, see @DanielElton's article on why it's not as Osborne's spun it: http://t.co/KQL5m011
http://twitter.com/ladyroisin/status/124168745689169920 LadyRoisin

And on the Swiss tax deal, see @DanielElton's article on why it's not as Osborne's spun it: http://t.co/KQL5m011
http://twitter.com/hushbone/status/135468820629434368 Hush Bone

Apparently #Osborne already has a role in a new production of Oliver http://t.co/RDh2iTh6 so might not be able to play himself in #ecomovie