Contractors who have not chosen to invoice through a reputable umbrella company may need to know that the long-awaited tax treaty between the UK and Switzerland should be signed at the end of this month.
Discussions between the governments of the two countries about taxing the deposits held by UK citizens in Swiss banks began in October last year. It is thought that a withholding tax of between 25% and 35% will be introduced. Swiss banks acting on behalf of British customers will deduct the tax automatically and remit it to the UK Treasury via bank electronic transfer. The Treasury expects to benefit by as much as £6 billion from the arrangement.
The withholding tax could be applied to funds dating back up to ten years but British depositors will still retain their anonymity. The Swiss authorities will not routinely disclose taxpayers’ names.
However, the UK government will be able to request this information if they believe a Swiss bank account is being used solely as a means of tax evasion.
Meanwhile, a disclosure agreement between the UK and Belize has come into force. The Tax Information Exchange Agreement was signed last March and took effect as from the first of August. This agreement is designed to stamp out criminal tax evasion and will effect transactions conducted on or after August the first.
In addition, a protocol to the double tax agreement between Qatar and the UK came into force at the beginning of this year and affects taxes withheld at source.
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Image: February 5, 2010 – Paperwork by nerdcoregirl
