The shortfall “will be an embarrassment to the [UK’s coalition government] at a time when it is clamping down on tax avoidance by rich individuals and companies,” the publication noted.
A spokesman for HM Revenue & Customs, however, said it was too soon to be certain yet how much the scheme would bring in, and added: “It’s important to remember this is money that without this groundbreaking agreement, would largely remain untaxed.”
Under the UK/Swiss agreement, which came into force on 1 Jan 2013, taxpayers who have accounts in Switzerland may make a one-off payment to HMRC to settle any outstanding tax liabilities. This one-off payment was deducted from accounts in May, and the funds, according to HMRC, are being paid over to the UK in monthly instalments until June 2014.
The Times disputes this, however, quoting accountants who said the scheme was in fact "unlikely to raise much more" than the £747m it has thus far, "because the bulk of the tax due should have been paid in May".
“It was massively optimistic [for the Treasury] to expect it might actually recover £3.2bn,” the paper quoted Ronnie Ludwig, a partner at Saffery Champness, as saying.
Ludwig noted that individuals who were keen to remain outside of HMRC’s tax net would "continue to use very sophisticated tax planning structures" to do so.
According to the Times, on top of the £747m raised thus far, an additional £610m is expected to be raised next year, "falling to £150m in subsequent years".
Frank Strachan, a tax partner at the London law firm Edwin Coe and an expert on HMRC disclosure regulations, said he thinks one reason the numbers may have been lower than projected is because some taxpayers with Swiss accounts "simply moved funds out of Switzerland" ahead of the scheme’s taking effect.
"Funds have been moved to a number of jurisdictions around the globe, but HMRC will only be provided with a list of the top 10 jurisdictions to which assets have been sent," he added.
That list is relatively worthless, though, he noted, because "most people in the business know the top 10 jurisdictions anyway".
Strachan said the next question will be how HMRC ultimately seeks to negotiate transparency agreements with those jurisdictions; and where those who have moved their assets out of Switzerland will go next, as the number of jurisdictions willing to take "non-compliant" assets continues to shrink.
"HMRC are not in any particular rush," Strachan noted. "if people don’t wish to disclose now, HMRC will wait until they have nowhere left to run – it will be then that HMRC’s real claws will come out, and the 10% penalty deals of the likes of the LDF will be a distant memory."
As reported, the agreement was approved by the Swiss parliament in 2012, and obliged all UK holders of Swiss bank accounts to either make a one-off payment by 31 May 2013 that would clear all past, unpaid tax liabilities, or to pay a withholding tax on any future income and gains accrued from 1 Jan 2013.
These account-holders also were given the option of making a full and open disclosure to the Revenue or using the so-called Liechtenstein disclosure facility, another scheme aimed at encouraging those with unpaid tax obligations to settle their outstanding tax affairs.
Similar deals were struck between Switzerland and the German and Austrian tax authorities, although the German deal was subsequently vetoed by German lawmakers.
To read the story on the Times’s website, click here.