A crackdown on offshore tax dodges by wealthy individuals and large companies will add an extra £1.5bn to the Treasury's coffers, Alistair Darling said in yesterday's budget.
Stiff penalties on those keeping untaxed wealth in offshore havens will increase from April, while attempts by companies to "lose" profits offshore and pay less tax will come under closer scrutiny.
Measures will also safeguard £4bn of tax receipts that Treasury officials feared would be unpaid by businesses and individuals using homegrown tax avoidance schemes or offshore trusts.
Darling said: "While people are suffering hardship, it is all the more unfair that some are escaping their tax obligations. I am determined to continue our successful drive to prevent avoidance and evasion. Measures in this budget will bring in additional tax worth half a billion pounds while protecting £4bn worth of revenues by 2012-13."
In one instance last year, self-employed and City workers were found participating in schemes in which charitable donations disguised tax scams.
HM Revenue & Customs estimated last year that the size of the tax gap on individual incomes could be anything between £3.7bn and £13bn. The Commons public accounts committee put it at a possible £8.5bn and the TUC said £12bn.
But tax experts and the main accounting firms had stressed in consultations with the Treasury that it could expend thousands of hours and millions of pounds chasing wealthy tax dodgers and not achieve much extra revenue.
Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, said the government had latched on to tax avoidance as a crowd-pleaser, but it would raise only limited amounts of cash. "Tax havens are always going to take a bashing from the chancellor, but it's something of a sideshow.
"With so many more pressing problems for the nation's finances, it really is frustrating that the chancellor is overly focusing on an area with so little impact on the economy.
"The UK receives a significant level of business from offshore jurisdictions, but changes by the chancellor regarding tax avoidance could threaten this. Tax havens do not have a significant part to play in any current financial problems."
The Treasury said that by 2012/13 it expects to save at least £155m from limiting double taxation reliefs on company profits.A beefed up disclosure regime, which forces those with money offshore to declare the amounts, will raise £125m by 2012/13, while a deal with Liechtenstein is due to bring in £500m over three years.
Those people who fail to declare offshore accounts face fines worth 200% of their tax bill, double the current penalty.