Buried amid all the UK budget noise, some Swiss poison
The UK has just signed a new and highly poisonous agreement with Switzerland: a protocol amending the original final withholding tax (Rubik) deal. See the press release here.
We don't doubt they have decided to bury this story by announcing it just ahead of the budget, when UK economic journalists' attention will be elsewhere.
For Rubik wonks, Mark Herkenrath pulls out the key section from the press release:
"At the same time, it will be ensured that UK taxpayers can discharge their tax liability on interest payments. Effectively, nothing will change for bank clients; their tax obligations will be fulfilled. Only the legal structure will change."
The European Commission will strike this down, we don't doubt, and it will be child's play to evade it. As we've noted before, they have effectively planted flags in this deal saying 'evade me here.' We don't have time to do justice to this monstrosity today, but Richard Murphy has covered some of the points I'd make here. As he notes:
This is grand corruption in the UK tax system
It is. That is not an exaggeration. We would add, crucially, that this deal won't raise revenue. This dog don't hunt - as we've repeatedly demonstrated. And the combined might of the Swiss Bankers' Association, UK Revenue and Customs (HMRC), the UK private accountancy profession, have all been challenged to say where my analysis is wrong. And none has landed even a blow.
An informed insider asked us, citing the press release:
Can't tell you how disgusted I am with UK.Every time you think things just can't get sicker, they do.
"In addition, mutual market access for financial services will be improved".
Why is UK fighting so hard against EU to support Swiss banking secrecy? Is it [outgoing and disgraced HMRC head] Dave Hartnett protecting his agreement and reputation before he leaves office?