Cowboy tax advisers who use avoidance schemes that push the law to its limits will be named and shamed, the Government said today.
Ministers said HM Revenue and Customs will also force so-called experts who promote aggressive avoidance schemes to publish lists of their clients.
The crackdown should help recoup £5 billion for the public purse, which accounts for 14% of uncollected taxes, Exchequer Secretary David Gauke said.
When tough decisions needed to be made to cut the budget deficit, it was galling for the hard working majority to see others shirk their civic duty by using aggressive avoidance schemes, the minister told the think-tank Policy Exchange.
His comments came as the Government launched a consultation paper on its planned reforms. It follows a wave of disclosures about the financial loopholes used by the rich and famous to legally side-step hefty tax bills.
Mr Gauke said: "At a time of economic difficulty, when tough decisions have to be made on public spending and when the burden of taxation remains high, there is little sympathy for those who do not make their full contribution.
"For those who work hard and pay their taxes, it is galling to see others shirk their responsibilities on either front."
He said there was a stark difference between major accountancy firms which used legitimate methods to reduce their clients' tax bills and niche outfits who peddle crude schemes to avoid liabilities.
Mr Gauke added: "These schemes damage our ability to fund public services and provide support to those who need it.
"They harm businesses by distorting competition. They damage public confidence and they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride.
"These firms behave differently to the well-established, reputable advisory firms. They change name frequently to avoid detection; they include fighting funds in their fees, pre-empting an inevitable clash with the authorities, and often do not comply in full with HMRC's disclosure rules."
The Treasury hopes the reforms will mean officials, often hit with dead-ends when investigating schemes that are based off-shore, will be able to follow up new leads as cowboy tax advisers are forced to disclose their client databases.
Those customers will then be formally warned how much they could owe if the scheme fails to stand up to legal scrutiny.
Today's announcement comes after comedian Jimmy Carr last month admitted to making a "terrible error of judgment" when it emerged he used a complex scheme to reduce his tax bill. The K2 tax-avoidance scheme Carr is said to have used enables members to pay income tax rates as low as 1%.
But union leaders said the Government would be better off closing the loopholes used by avoidance schemes.
Brendan Barber, TUC general secretary, said: "As well as targeting aggressive tax avoiders, ministers must cut this multi-billion pound problem off at source by closing the many loopholes that the super-rich exploit.
"Successive governments have run shy of reforms to ensure the very wealthiest pay their fair share of tax. But with countries around the world under pressure to reduce deficits, fair tax is an economic necessity."
The TaxPayers' Alliance said ministers needed to concentrate on reforming the complex tax system.
Matthew Sinclair, director of the TPA, said: "The Government is right to act to ensure that everyone pays their fair share of tax, but new powers to uncover specific abuses are a poor substitute for serious reform of the tax system so that there are fewer loopholes.
"Ministers need to be more realistic about HMRC's ability to clamp down when its resources are so stretched simply administering our hideously complicated taxes, let alone chasing those finding creative and legally dubious ways around them.
"With a better tax system, HMRC staff can focus their attention on tackling those who are abusing the system. Proper reforms can ensure that everyone pays no more, and no less, than their fair share."
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