Mar 20 2012

Buried amid all the UK budget noise, some Swiss poison

Posted by: Nick Shaxson in: Thoughts

Co-written with the Tax Justice blog

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.

I don’t doubt they have decided to bury this by signing it just ahead of the budget, when UK economic  journalists’ attention will be elsewhere.

For Rubik wonks, Mark Herkenrath pulls out the key section: “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, I don’t doubt. I don’t have time to do justice to this monstrosity, 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. I would add, crucially, that this deal won’t raise revenue. As I’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.

Every time you think things just can’t get sicker, they do. As any reader of Treasure Islands will know, I was furious with the last UK Labour government for what they did with tax and the City of London. But this bunch are in another league altogether.

3 comments so far

Alien Edouard 3th March, 2012 4.21 pm

Don’t you live this? Released on the very day that Schlumpf visits Semeta. The UK and Switzerland might have well sent him a “f****ck you” card.

I guess the time has come for me to say “I told you so”. To which you reply is “yes, you were right all along”. Thank you Nick, you lack in knowledge but you are good sport. You will hopefully realize that you are now a little short in the credibility compartment.

I would love to see Morris’ face right now. It must be truly priceless. C’mon Morris, your cartoons are really good, and there is a great future for you in shoe-shining. But you are still going on your website about how the protocol contradicts the ESTD. Morris, look at a map, Switzerland is not part of the EU and therefore not a party to the ESTD. I have explained everything to Shaxson here (

Nick Shaxson 3st March, 2012 7.22 am

I think you might like to take a look at this.
As you can see, it is entirely up to the European Commission to decide whether or not this deal fits with EU law, and not the other way around as you have asserted all along. I guess the time has come for me to say “I told you so”. To which your reply is “yes, you were right all along”. Thank you Eduardo.

You know, you have commented quite a lot on my blog, frequently in a hostile way, and occasionally downright rudely. But in all your hostile comments, I am straining to remember a single occasion where you were right.

Steve Gibbs 4rd April, 2012 10.09 am

I had to sell my house to pay HMRC and my creditors. I have paid tax diligently for the past 40 years. Thankyou for explaining that we live in a plutocracy. It’s what I love about being a Christian – knowing the truth. Expose evil. May the City Corporation of London start to shake with fear of the Lord through which is the beginning of all wisdom.

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