UK Chancellor George Osborne met with his Swiss counterpart Hans-Rudolf Merz
The UK and Switzerland have signed a declaration to begin negotiations on tax issues in a step towards making Britons with Swiss bank accounts pay tax on the interest they earn.
Switzerland has strict secrecy laws and has long attracted the very wealthy as a place to save their money.
Treasury sources said negotiations were in the early stages and no details of tax rates had been agreed.
An agreement between Liechtenstein and the UK is expected to raise about £1bn.
Any agreement between the UK and Switzerland may raise more than that as there are more accounts in Switzerland.
Withholding tax
The declaration followed talks between UK Chancellor of the Exchequer George Osborne and the Swiss Finance Minister Hans-Rudolf Merz in London.
Formal negotiations will cover the possibility of implementing a withholding tax, which would see Swiss authorities levying a tax on interest earned in their accounts on behalf of HM Revenue & Customs. The UK would push for this to be a retrospective tax.
The UK is also expected to push the Swiss authorities to provide more information on accounts held by UK taxpayers
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