Osborne looks to net £4 billion more from crackdown on tax debt

The UK government's coffers would receive a boost from fresh crackdowns on tax dodging, according to the chancellor, George Osborne.

Additional collections are expected at £4 billion over the next four years, after extension of rules that force people to pay tax debts immediately, after avoidance schemes were found to be unlawful.

Individuals could earlier delay settling bills, until the legal appeals had concluded which amounted to a tax-free loan from the public purse.

According to aides to Osborne, the change would affect 33,000 people earning an average of £262,000 a year.

The hope was that by insisting on up-front payment the incentive for people to invest in complex tax avoidance vehicles even after they had been ruled invalid, would be removed.

Another high-profile move would result in increasing the punitive 15 per cent stamp duty rate on houses bought through shell companies.

It would now be applicable to all residential properties worth more than £500,000, rather than the earlier £2 million. The move was expected to bring in only £365 million for the Exchequer by 2018-19.

HM Revenue & Customs would also gain stronger powers for recovery of tax and tax credit debts directly from people's banks and building societies.

According to commentators, Osborne looked to adopting a tougher "pay now, argue later" approach for over 30,000 of the richest and most sophisticated tax avoiders in the UK.

The move is expected to help HM Revenue & Customs deal with its costly backlog of dispute cases, and bring in revenues to fund measures announced elsewhere in the budget.

Further, according to the chancellor move would "fundamentally reduce the incentive to engage in tax avoidance" by ensuring that avoiders were unable to benefit financially from the often long drawn out procedures by sitting on money that should be in the taxman's coffers.

Among the highest profile avoidance schemes the HMRC war targeting were the so-called film partnership investments – popular with celebrities, footballers and investment bankers – which generated losses that could be offset against income.

Former head of the HMRC, Dave Harnett, called the schemes, "scams for scumbags", before he stepped down in 2012.

According to estimates of officials, the average earnings of those involved in disputed avoidance schemes was £262,000, or nine times the national average. Revenue figures suggested that 85 per cent of the alleged wealthy tax avoiders were male, and 87 per cent were aged between 35 and 64.