FT takes apart Osborne’s Swiss tax deal

Today's Financial Times has drilled an alarming number of holes in George Osborne's much-spun anti-tax evasion deal with the Swiss authorities last week.

Today’s Financial Times has drilled an alarming number of holes in George Osborne’s much-spun anti-tax evasion deal with the Swiss authorities last week. The Tories had gleefully tweeted how “nobody would have anticipated we would conclude an agreement with Switzerland to tackle tax evasion”, with loyal right wing commentators hailing the deal.

The criticism that “better than nothing is not good enough” will prove harder to spin, however.

In its leader, entitled “evading evasion”, the FT says (£):

“The UK government says the agreement will secure £6bn worth of absconded tax dues for the UK Treasury. That is better than nothing.

“But the real test is whether it is now sufficiently unattractive to violate UK tax law and whether this was the best possible deal. The answer is no.

“First, evaders will still pay less than if they had gone by the law. The withholding tax on investment returns is below the top rate in the UK – by a quantitatively marginal but symbolically significant difference. The one-off levy, too, is unnecessarily forgiving for principal that was not taxed when it was first earned.

“Second, this is an anti-evasion measure that seems all too easy to evade. The one-off tax will only be levied on accounts still open after May 2013. That is plenty of time for evaders and their Swiss bankers to discuss where it might make most sense to place the money next. Lichtenstein, which has a less taxing agreement with the UK, is being mentioned, but there is an abundance of other tax havens.

“Third, though the deal is not presented as an amnesty, it is hard to spot the difference. To let account holders who can keep not declaring their accounts settle their tax liabilities by paying less than regular UK residents smacks of permitting some people to pay their way out of obeying the law.”

It concludes (£):

“It is hard to imagine that no better deal could be had. Switzerland until recently got away with facilitating the breaking of other countries’ laws – mainly because those countries let it. That Bern is yielding shows that pressure works.

“Germany and the UK should not treat their bilateral deals as the last word – and they should support a tougher common European approach vis-à-vis Bern…”

The FT’s last point, about the lack of a global deal to tackle 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 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.”

45 Responses to “FT takes apart Osborne’s Swiss tax deal”

  1. Bristol NUJ

    FT take apart Osborne’s Swiss tax deal: http://t.co/mdYHrDL reports @ShamikDas

  2. Ian Greener

    RT @leftfootfwd: FT take apart Osborne’s Swiss tax deal: http://t.co/YDon2bq reports @ShamikDas > shameful in present situation

  3. Alex Braithwaite

    RT @leftfootfwd: FT take apart Osborne’s Swiss tax deal http://t.co/ua5wkfL Rightly so and about time too

  4. Shamik Das

    FT takes apart Osborne’s Swiss tax deal: http://t.co/mdYHrDL reports @ShamikDas

  5. Michael

    FT takes apart Osborne’s Swiss tax deal: http://t.co/mdYHrDL reports @ShamikDas

  6. Georgina Lansbury

    RT @leftfootfwd: FT take apart Osborne’s Swiss tax deal http://t.co/ua5wkfL Rightly so and about time too

  7. DPWF

    The Financial Times has scathingly criticised the #Swiss #tax deal of #Osborne. It calls it an amnesty to tax evaders. http://t.co/qjoRjlo

  8. Wills Heaney

    FT takes apart Osborne’s Swiss tax deal: http://t.co/mdYHrDL reports @ShamikDas

  9. Paul McGlynn

    RT @leftfootfwd: FT takes apart Osborne’s Swiss tax deal http://t.co/y0MHpmC

  10. manishta sunnia

    Even FT sees through UK Govt's smokes screen on Swiss tax deal http://t.co/WEIdjud #osborne #taxation #nocuts

  11. Sandra Ayres

    Even FT sees through UK Govt's smokes screen on Swiss tax deal http://t.co/WEIdjud #osborne #taxation #nocuts

  12. Patricia Farrington

    RT @leftfootfwd: FT take apart Osborne’s Swiss tax deal: http://t.co/YDon2bq reports @ShamikDas > shameful in present situation

  13. Richard Murphy

    "@leftfootfwd: FT takes apart Osborne’s Swiss tax deal: http://t.co/k9uKcOn reports @ShamikDas" Good to see FT shares my view on this deal

  14. VeeBee

    "@leftfootfwd: FT takes apart Osborne’s Swiss tax deal: http://t.co/k9uKcOn reports @ShamikDas" Good to see FT shares my view on this deal

  15. Owen O'Donnell

    FT takes apart Osborne’s Swiss tax deal: http://t.co/mdYHrDL reports @ShamikDas

  16. Shamik Das

    "@leftfootfwd: FT takes apart Osborne’s Swiss tax deal: http://t.co/k9uKcOn reports @ShamikDas" Good to see FT shares my view on this deal

  17. Duncan Keeling

    Osborne’s Swiss tax deal http://t.co/VmNMJPu "permitting some people to pay their way out of obeying the law” #artfuldodging @38_degrees

  18. Jos Bell

    "@leftfootfwd: FT takes apart Osborne’s Swiss tax deal: http://t.co/k9uKcOn reports @ShamikDas" Good to see FT shares my view on this deal

  19. Robert

    Remind me of Labour tax rules for people living here like the Lord Pauls, ah yes they had to pay tax, after how many years. I think yes maybe the Tories tax on people in the Swiss alps maybe crap it’s just as crap as Labour.

  20. james

    But again this article and presumably the FT article that underpins it shows the problem of this sort of criticism. On the one hand Osborne is being too soft and on the other he risks driving tax avoiders to Liechtenstein and beyond. Surely that is the point of the deal – to strike a very tough balancing act.

    I would argue that something is much better than nothing. If an EU agreement finally puts something better on the table that cuts out other loopholes – then great. If not, then at least we will get something at a time when the Nations finances most need it.

    If, as some say, that this agreement destroys the dream of an EU agreement – then it was already destroyed by the German deal and we were right to seek a bilateral agreeemnt.

    Labour’s record on tax avoidance/evasion was virtually non-existent.

  21. Lili Georgieva

    "@leftfootfwd: FT takes apart Osborne’s Swiss tax deal: http://t.co/k9uKcOn reports @ShamikDas" Good to see FT shares my view on this deal

  22. Guy Manchester

    FT takes apart Osborne’s Swiss tax deal: includes loopholes as devilishly cunning as moving their £'s out of Swizland: http://j.mp/mXghVg

  23. Political Planet

    FT takes apart Osborne’s Swiss tax deal: Today's Financial Times has drilled an alarming number of holes in Geor… http://t.co/yUQbx4V

  24. Patrick Corbett

    RT @leftfootfwd: FT takes apart Osborne’s Swiss tax deal http://t.co/7t9yCQ7

  25. Leon Wolfson

    Germany’s deal is very likely to be rejected by their legislature, and rightly so.

    And the choice isn’t this or nothing. It’s this or the deal they’ve backstabbed, a comprehensive EU tax treaty which would have ensured actual compliance, not an effective tax reduction for the rich.

    The EU can and should bill the UK for this, incidentally.

  26. Jeffrey Newman

    "@leftfootfwd: FT takes apart Osborne’s Swiss tax deal: http://t.co/k9uKcOn reports @ShamikDas" Good to see FT shares my view on this deal

  27. ross ofcourse

    FT takes apart Osborne’s Swiss tax deal: includes loopholes as devilishly cunning as moving their £'s out of Swizland: http://j.mp/mXghVg

  28. Jeffrey Newman

    So – the truth about Osborne's 'better than nothing' #taxdeal with Switzerland is emerging – via the FT! http://t.co/En7klMu

  29. Think Left

    "@leftfootfwd: FT takes apart Osborne’s Swiss tax deal: http://t.co/k9uKcOn reports @ShamikDas" Good to see FT shares my view on this deal

  30. Robin CGM

    "@leftfootfwd: FT takes apart Osborne’s Swiss tax deal: http://t.co/k9uKcOn reports @ShamikDas" Good to see FT shares my view on this deal

  31. Richard

    Straw man argument from Robert and August. Instead of addressing the issue at hand, that is looking FORWARD to and working towards the strong possibility of getting Berne to bend to an international agreement, what is the best these peuerile eejits can come up with? “Oh miss, miss, he started it first.” And where the hell is that going to get us, hey?

  32. Smithy

    FT takes apart Osborne’s Swiss tax deal: http://t.co/GasTKBo (via @leftfootfwd )

  33. heather smart

    FT takes apart Osborne’s Swiss tax deal: http://t.co/mdYHrDL reports @ShamikDas

  34. Dave Citizen

    I have a plan – find out who’s been avoiding taxes and put them on the dole – replace them with one of the millions of people who care about their country and wouldn’t dream of cheating it so they can grab even more for themselves. Such people are very similar to the worst of the recent rioters – no social responsibility or concern for others, just me me me, grab grab grab.

    As with the rioters and as a caring society, we should be willing to rehabilitate them and teach them how to work hard for a reasonable living and the common good.

  35. Mr. Sensible

    Headline grabber.

  36. Andrew Little

    http://t.co/A7vm2gT Osbod's Swiss deal wont make slightest difference. Tax evaders will simply move money elsewhere.

  37. Andrew Little

    http://t.co/A7vm2gT Idiot Osbod's Swiss deal wont make slightest difference. Tax evaders will simply move money elsewhere.

  38. Darren

    We are reading a lot about the fact that the German-Swiss deal may not be approved by Germany’s Congress, but it is simply wishful thinking on the part of some. It is true that Merkel does not have a majority in the German Senate, but she has more than one way to “buy” a few votes if she comes up short. Remember that Germany continues to see vast fiscal transfers from West to East, which makes it very easy to trade favors across the aisles of the legislature. While nothing is certain except death, it is a safe bet that this treaty will be ratified, most likely on a day where everyone else is looking the other way and is busy putting out a fire across the EMU.

    We also read a lot about an elusive EU agreement on the taxation of savings. People need to get their facts right: the problem about the agreement is only indirectly related to Switzerland. The deadlock is actually within the EU, where there is strong opposition to the lifting of banking secrecy. Luxembourg and Austria have always objected to it and consistently said they would veto any such legislation and from 2009 onwards, it became clear to many parties that the EU would not succeed in changing their position. Germany lost patience and In January 2010, soon after Schaueble took office, Europe’s German-speaking countries started to negotiate the matter outside of the EU framework. Essentially Austria, Switzerland and Luxembourg told Germany that automatic exchange was never going to happen, and that they should work on an alternative model. There was an informal meeting of the gang of five (with Liechtenstein) in August 2010 in which Germany and Switzerland agreed to start negotiations around their bilateral agreement.

    The EU found out or was told about it, understood that Germany was no longer going to push for automatic exchange and started to redraft the revised directive on the basis of a compromise that would not force Austria and Luxembourg to abandon banking secrecy and would instead make the withholding regime permanent, but retained the rest of the revisions. Italy got very upset and started to throw its toys. The whole thing descended into a European farce. This helped the UK government, which was not at all in the flow of what the German-speaking countries were cooking up, realize that the EUSD was not going anywhere fast. To his credit, Osborne was successful in convincing the Swiss of starting a parallel process to that with Germany when the Swiss really did not need to.

  39. London IWW

    #Capitalism: FT takes apart Osborne’s Swiss tax deal http://t.co/0O1ssIb | #TaxAvoidance #Corporatocracy

  40. Leon Wolfson

    Great, that doesn’t mean that he’s any less guilty of directly helping tax evasion and growing the tax gap with this “deal”.

    Lower tax for the rich, social cleansing for the poor.

  41. Getting the Sums Right: Why I’m Campaigning To Get Our PFI Tax Back | Working for Walthamstow

    […] as a by product.  However, a new report from the Public Accounts Committee published today shows again when it comes to tax this Government is all avoidance and no […]

  42. Time to get our PFI tax back | Left Foot Forward

    […] receipts as a by product. However, a new report from the Public Accounts Committee published today shows again when it comes to tax this government is all avoidance and no […]

  43. Graham Pearson

    Well the British Government has done it again. They have come up with something and totally forgotten that the people they effect will come up with something else even more elusive. Being ignorant of management technigues they always forget to play the ‘what if’ game. If I did that, what will happen. I’m just wiating for the Russian Federation to offer numbered accounts to all westerners. Soon it would be worth the Eastern Bloc Countries doing this. WOW Good luck George, Go back to school and do some management training. When you go to get the taxes ther will not be anything there. Did not the USA try the same thing.

  44. Shamik Das

    Don't just take our word for it, the FT have also savaged Osborne's Swiss tax deal: http://t.co/ka14Hwyf

  45. Mabel Horrocks

    Don't just take our word for it, the FT have also savaged Osborne's Swiss tax deal: http://t.co/ka14Hwyf

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