Ed Balls
Ed Balls, Labour's shadow chancellor, says  Labour will impose fines of up to 100% of the value of avoided tax Reuters

Ed Balls said Labour will bring in tough penalties to deter people from tax avoidance if they get into power at the next general election.

Labour will impose fines of up to 100% of the value of the avoided tax, said the shadow chancellor.

As it stands, those who are caught dodging the taxman only have to pay back what they owe under the government's General Anti-Abuse Rule (GAAR).

The Shadow Chancellor said that tackling tax avoidance is imperative to keeping the public support, allowing for a more open market economy, getting the deficit down and raising revenues to protect the NHS.

Balls said that at a time when wages are low, no political party can afford to take the public for granted.

"Business and politicians alike cannot afford to bury our heads in the sand and ignore the legitimate and mainstream concerns of people across our country that our economy is not currently working for them," he said.

"That's why Ed Miliband and I want big changes to create an economy that works for working people and a recovery for the many, not just a few.

"Tackling tax avoidance is a key part of our economic plan. A fair and robust tax system is vital if we are to bring down the deficit, safeguard our National Health Service and maintain public support for the dynamic open economy we need.

"At the moment, we are going in the wrong direction. The amount of uncollected tax – the so-called 'tax gap' – rose again to £34 billion in the latest year on HMRC's own estimates. It's up by £3 billion under this government and tax campaigners have suggested the true figure could be much higher."