Government introduces new tax avoidance penalties

It is also launching measures to shut down inappropriate use of the VAT flat rate scheme that was put in place to help small businesses.

It will abolish the tax advantages linked to Employee Shareholder Status in response to evidence it is "primarily being used for tax-planning purposes by high-earning individuals".

Philip Hammond commented: "At the Budget we committed to removing the tax benefits of disguised earnings for employees, and I am now going to do the same for the self-employed and employers, raising a further £630 million over the forecast period.

"These measures – and others set out in the Autumn Statement document – raise around £2 billion over the forecast period.

"There is understandable public concern that the pitch is tilted in favour of large multinational groups which are able to use cross-border structures to manage their tax liabilities.

"Following detailed consultation, I can confirm that we will implement our new restriction on tax relief for corporate interest expenses, and reform the way that relief is provided for historic losses.

"These measures, scored at Budget 2016, will help to ensure large businesses will always pay tax in years where they make substantial profits. They will also mean that businesses cannot avoid tax by borrowing excessively in the UK to fund their overseas activities.

"They take effect in April, and raise over £5 billion from the largest businesses in the UK."