Darling set for offshore crackdown

ALISTAIR Darling will use tomorrow’s Budget to step up the government’s crackdown on offshore tax evasion by doubling the maximum penalty.

Treasury sources said that the chancellor thinks he can protect £1bn of revenue by increasing the penalty to 200 per cent of tax owed.

The measures are tougher than the ones announced in the pre-Budget report in December, and apply to all forms of tax evasion, Treasury sources said last night.

Meanwhile, Darling will also announce new lending targets for banks. He will tell the Royal Bank of Scotland and Lloyds Banking Group to lend £90bn to UK businesses in 2010, up from £75bn last year.

“The targets reflect that the economic situation is expected to get better,” a Treasury spokesman said.

But the banks insist that they are struggling to meet lending targets because demand is so weak.
The Treasury fears that banks are using taxpayer money to rebuild their balance sheets rather than lending to businesses.

The Bank of England warned that commercial lending had shrunk by £6.5bn in January, far worse than expected.

The Treasury has said it will publish details of the first year of the banks’ lending under the agreements by early April.