Illegal immigrants will face up to six months in prison for working in the UK, the Government announces today.
A new crackdown will also see late-night takeaways and off-licences facing closure if they are caught employing foreigners who have no legal right to be in the country.
Details of the legislation have been revealed after the Government faced criticism for its handling of the Calais crisis and days before the release of the latest immigration figures, which could show the key measure has reached record levels.
Immigration Minister James Brokenshire said: "Anyone who thinks the UK is a soft touch should be in no doubt - if you are here illegally, we will take action to stop you from working, renting a flat, opening a bank account or driving a car.
"As a one nation government we will continue to crack down on abuse and build an immigration system that works in the best interests of the British people and those who play by the rules.
"Illegal workers will face the prospect of a prison term and rogue employers could have their businesses closed, have their licences removed, or face prosecution if they continue to flout the law."
Earlier in the year the Government announced that a new offence of illegal working will allow wages to be seized as proceeds of crime.
Now the Home Office has disclosed that anyone convicted under the powers in England and Wales could face a sentence of up to six months and an unlimited fine.
Rogue businesses are also being targeted.
Under the new regime, any pub, off-licence or late-night takeaway that fails to comply with immigration laws or employs illegal workers could be stripped of their licence to operate. Officials are also considering whether this power should be extended to cover minicab drivers and operators.
The law on cases for deliberately employing illegal workers will be changed to pave the way for more prosecutions.
Precise details of the reform have not been given but it is expected to mean lower requirements on the evidence needed to prove the offence by forcing accused businesses to show they have carried out all relevant checks before employing an individual.
The maximum sentence for those found guilty will be raised from two to five years in addition to heavy fines which are already levied against culprits.
Employers who continue to flout the law and evade sanctions could see their business closed for up to 48 hours while they prove right-to-work checks have been conducted on staff.
Courts would then place the worst offenders under "special measures" such as forcing them to remain shut or carrying out ongoing compliance checks.
Alp Mehmet, of Migration Watch UK, which campaigns for tighter immigration restrictions, said: "This is not just about not being seen as a soft touch.
"More important is for the message to go out that if you are here illegally and caught working, you and your employer will end up in court.
"Let us hope that the authorities will not shy away from acting on the powers they are to be given, since their record on that front has not always been exemplary."
Under previously announced measures in the bill, banks will be forced to check current accounts against migrant databases and landlords who fail to remove illegal immigrants could face jail.
The Government's record on immigration will come under intense scrutiny again on Thursday when the latest official immigration statistics are released.
The last set of data showed that net long-term migration - the number of people entering the country minus the number leaving - was 318,000 in 2014.
Only a small increase would be needed in the new statistics to surpass the highest figure on record, which was 320,000 in the year to June 2005.