Swiss face losses in tax payments deal

Swiss banks could be left out of pocket as a result of a tax-evasion deal agreed between the Alpine state and the UK.

Last year Switzerland said that its banks would pay SFr500m (£347m) upfront to the UK Treasury as part of an agreement to clamp down on tax evasion by British citizens.

This was supposed to be recoverable by the banks from the savings accounts of British subjects in the country. But yesterday the Swiss Bankers’ Association warned that there were fewer untaxed British assets in the country than it first thought, meaning that the banks might not be able to recoup the upfront payment.

“The possibility cannot be ruled out that either none or only a small part of the banks’ guarantee payment will be recovered,” the SBA said.

Credit Suisse expects to register a loss of SFr90m as a result.

Switzerland agreed to impose a withholding tax on UK savers in exchange for a right to retain its traditional banking secrecy.

The country has signed similar deals with Austria and Germany.