Osborne unveils new powers to target tax evaders

Chancellor George Osborne is unveiling a new raft of weapons for prosecutors and tax authorities to clamp down on wealthy people who use offshore accounts to evade or avoid tax.

Mr Osborne said the moves – part of a £5 billion clampdown on tax avoidance – will help prevent the public spending “roller coaster” which independent economists believe will result from his Budget plan to end austerity a year early in 2018/19.

The Office for Budget Responsibility warned of a “sharp acceleration” in the pace of reductions to public service spending between 2016 and 2018 while the Institute for Fiscal Studies predicted “significant and some really quite deep spending cuts” over the same period.

But Mr Osborne insisted that balancing the books was necessary to provide the “stability” needed to deliver high-quality health, education, defence and law and order over the long-term.

He said that part of the burden of £30 billion worth of savings planned by the Conservatives would be shared by £12 billion reductions in welfare spending and £5 billion in tax avoidance measures.

Meanwhile, Liberal Democrats were setting out an “alternative Budget” which Treasury Chief Secretary Danny Alexander said would eliminate the deficit “in a fairer way” by ensuring a “substantial proportion” of the burden of consolidation is borne by tax increases.

Shadow chancellor Ed Balls said that Mr Osborne’s plans meant cuts “more severe in the next three years than the last five”, which would almost certainly lead to VAT rises or resources being taken out of the NHS if Tories win the May 7 general election.

Mr Osborne announced he was “coming after” tax evaders with new criminal offences carrying heavy fines for individuals using offshore accounts to evade or avoid taxes and the accountants and other companies who help them do so.

The Chancellor told BBC1’s Breakfast: “What we are going to be announcing are far-reaching new criminal powers to go after people with offshore bank accounts and go after the companies who help people evade tax.

“It is a whole new set of weapons in our armoury to make sure that people make a fair contribution.

“By doing that, we can then reduce the burden of cuts in the departments and the savings we need to make on welfare.”