Treasury set to punish tax cheats

The maximum fines which can be imposed on tax evaders will be doubled in the Budget tomorrow, as Alistair Darling promises "fairness" in the tax system.

In the Treasury's latest crackdown on "tax cheats", the Chancellor will announce that fines will be raised to 200 per cent of the amount of unpaid tax.

Mr Darling will argue that everyone should pay their fair share of the tax burden while there is a £170bn estimated deficit in the public finances. He believes that hard-working families who pay their taxes should not subsidise those who abuse the system. The Chancellor hopes the threat of bigger fines will encourage more people to pay tax in the first place.

He has already announced higher penalties for accountants and tax planners who help people to evade tax and to "name and shame" those who cheat HM Revenue and Customs out of more than £25,000. The moves are expected to save the Exchequer more than £1bn.

Mr Darling will spell out a new list of efficiency savings running to billions of pounds, including crackdowns on benefit errors and fraud, helping people claim pensions and JobSeeker's Allowance online and reducing office space.

The Department for Work and Pensions will save £500m in 2012-13 by cutting its running costs.