- Osborne is promising a clampdown on UK tax dodgers, including several high profile multinationals
- MPs have labeled the tax practices of companies such as Starbucks, Google and Amazon "evasive and immoral"
- Osborne, who estimates the bid will raise £10bn in total, has acknowledged deficit reduction is taking longer than expected
George Osborne will on Monday set out plans for a "£10bn tax dodging clampdown", as he struggles to control the deficit and contain a growing outcry over the tax treatment of multinationals, including Starbucks.
His promise to tackle "unacceptable" tax avoidance in this week's Autumn Statement follows an admission that his deficit reduction strategy is off course: "It's clearly taking longer to deal with Britain's debts," the chancellor said.
Mr Osborne's comment adds fuel to speculation that the coalition will not hit its target of cutting debt as a share of national income by 2015/16, and that public spending cuts may have to be extended by another year until 2018.
The bleak fiscal backdrop has fuelled the political controversy over the tax contribution made by multinational companies, with MPs on Monday branding some practices as "immoral".
The Commons public accounts committee described the evidence it heard from Starbucks, Amazon and Google -- along with that of HM Revenue & Customs officials -- as "unconvincing and in some cases evasive".
The MPs accused the companies of "using the letter of tax laws both nationally and internationally to immorally minimise their tax obligations".
They called for a "change in mindset" at the Revenue so that it became more aggressive in policing and prosecuting companies that paid too little tax.
In anticipation of an expected public backlash following the report, Starbucks said it was "in discussions" with the tax authorities about its tax arrangements.
The coffee chain said that as part of its efforts to build public trust "we are looking at our tax approach in the UK". It said it had listened to employee and customer feedback over revelations it had paid just £8.5m of corporation tax since 1998.
Mr Osborne will give HMRC an extra £77m a year to focus on enforcement on multinationals, the wealthy and offshore evasion, particularly speeding up work on transfer pricing arrangements, where companies can shift profits out of the UK to lower tax jurisdictions.
He claims this will eventually build up to raise £2bn a year, while a separate deal with Switzerland would raise more than £5bn of previously uncollected taxes from Swiss bank accounts over the next six years.
Mr Osborne says that the cumulative total raised by the two initiatives is about £10bn, although only the Swiss deal has been officially scored by the independent Office for Budget Responsibility, which produces economic forecasts.
In a further recognition of public disquiet about the allocation of pain in Mr Osborne's deficit reduction plan, the chancellor confirmed the rich would pay more in his Autumn Statement, to offset a squeeze on benefit payments next year.