22/02/2015 08:11 GMT | Updated 22/02/2015 08:59 GMT

Tax Evasion Crackdown Would See Organisations That Fail To Prevent It Fined

Harold Cunningham via Getty Images
GENEVA, SWITZERLAND - FEBRUARY 18: A general view of HSBC Private Bank premises, where a search of the private bank's Swiss arm is currently underway on February 18, 2015 in Geneva, Switzerland. Swiss prosecutors are searching offices of the Geneva subsidiary of HSBC bank in an inquiry relating to alleged money-laundering. (Photo by Harold Cunningham/Getty Images)

Organisations which fail to prevent tax evasion would be subject to stiff fines under a new proposed crackdown, the Chief Secretary to the Treasury has said.

Danny Alexander, Chief Secretary to the Treasury, proposed creating a new offence of "corporate failure to avoid preventing an economic crime".

He said the idea would also see organisations who encourage tax evasion or make it easier for it to be carried out face the same level of fine as the evaders.

The Liberal Democrat front-bencher said he would make efforts before May's general election to see if progress can be made on the idea.

If not then it will become a key part of the Lib Dem manifesto, he added.

Speaking on the Andrew Marr Show on BBC One, Alexander said the idea would create a much stronger deterrent to companies helping tax dodgers.

He said: "Organisations, be they accountants, banks or whatever, who help people evade tax will be liable for this new offence and crucially liable for financial penalties.

"So, for example, if their customers have to pay back hundreds of millions of pounds in tax then those organisations should have to match that with hundreds of millions of pounds of their own money and I think that's a very tough disincentive to them to get involved in this in the first place.

"This is taboo. This is something that absolutely mustn't happen in our society and we still have a problem with some people thinking they can get away without paying their fair share of tax."

Alexander went on: "This is a Liberal Democrat idea for our manifesto. We've delivered a lot from our last manifesto tackling avoidance, tackling evasion.

"But I am going to seek to pursue this within Government over the next few weeks because I think we do have time potentially in the Budget or through other processes that are going through to take these ideas forward.

"But what I can say is if it we're not able to do that then we absolutely will be making this one of our key things in the general election."

The Lib Dems say their plan also includes making a commitment for the government to see the "tax gap" - the difference between the total tax owed to the Exchequer and the amount actually collected - fall in each year of the next parliament.

Codes of practice applying to tax advising professions would also be strengthened, the Lib Dems said.

In a statement, Alexander added: "These new measures will build on the successful strategy that is making tax evasion as socially unacceptable as benefit fiddling or drinking and driving."

For Labour, Chris Leslie said nobody will believe Alexander's "warm words" as the Lib Dems have "broken their promises on tax".

The shadow chief secretary to the Treasury said: "Along with the Tories, they have totally failed to tackle tax avoidance and cut taxes for millionaires while raising VAT on families and pensioners.

"The amount of uncollected tax has gone up by £3 billion under Danny Alexander and George Osborne.

"This Government has refused to close loopholes which Labour has highlighted. And ministers still need to explain why there has been just one prosecution out of 1,100 names in the HSBC case and why the head of the bank was made a Tory minister."

Leslie added Labour would have an immediate "root and branch" review of HMRC to ensure it is "up to the job".