Illegal immigrants caught working in the UK could be jailed for up to six months and their pay will be taken off them as proceeds of crime, under new government plans.
The crackdown will also see late-night takeaways and off-licences facing closure if they are found to be employing foreigners who are not entitled 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 ahead of the release of the latest immigration figures which could show efforts to tackle the issue are failing.
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 this 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 be jailed for up to six months and receive 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 that the onus will now be on accused businesses to prove they 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, hoped authorities would not "shy away" from acting on the powers they are to be given.
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 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. The Daily Mail claims that has happened.
The newspaper reported that the number of foreigners caught working unlawfully in the UK for the first three months of 2015, was at a record low of 752. During the same period last year 1,452 were caught.
The number of illegal workers fined had also dropped, it reported. In the year ending April 2010, some 2,339 penalties were handed out. This fell to 1,899 the following year before hitting a low of 1,270 in 2012-13.
The Daily Mail said only 85 employers had been prosecuted in magistrates courts for knowingly employing illegal immigrants in the last five years. The number jailed fell from 35 in 2009 to four in 2013.
There are an estimated 600,000 to one million illegal immigrants living in the UK.