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HM Revenue & Customs is to spend £1 billion on enforcement and compliance this year to cut tax avoidance and evasion by £2.4 billion, Britain's most senior tax collector said last night. Less than a week after the Chancellor proposed a rise in income tax to 50 per cent for the highest earners, the Revenue said that it would spend a quarter of its £4 billion budget on catching tax-dodgers. Lesley Strathie, who took over as the HMRC's chief executive and permanent secretary five months ago, said that the organisation would relentlessly pursue those who bent or broke the rules. The clampdown comes after a change of tack by the Revenue's prosecutors last year. In its “litigation and settlement review” the Revenue promised to take more people to court to recover tax instead of cutting deals in out-of-court settlements. With companies and individuals prepared to defend themselves in court, such a strategy has proved expensive. Hartley Foster, a tax partner in DLA, the law firm, said that it was no surprise that the Revenue would divert more money to enforcement after introducing a deliberate strategy of picking more costly court fights. He said that since the Revenue was under pressure to increase its overall tax take, it appeared to have decided that enforcement was a worthwhile area on which to spend money. Mr Foster said: “Like any other entity, the Revenue is dividing its budget on the basis of putting money into areas where they believe they will get the greatest return. Twenty-four per cent of the overall budget suggests compliance and enforcement is a major focus area for the coming year.” The amount that HMRC is prepared to spend on its tax crackdown was contained in its first department-wide business plan, which was published yesterday. Toby Ryland, a partner in Blick Rothenberg, the accounting firm, described the sum that HMRC is spending on enforcement and compliance, the biggest chunk of its expenditure, as “staggering”. He said: “Taxpayers can expect far more frequent enforcement actions, inquiries and challenges to their tax affairs and far greater scrutiny of their affairs, even where they have structured their finances within the letter of the law.” James Bullock, a tax partner in McGrigors, the law firm, said: “Compliance and enforcement is a large department that covers many areas. But £1 billion is still a huge amount of money and it shows the Revenue is serious when it says it plans to step up the fight against tax avoidance and tax evasion.” Ms Strathie said: “Our challenge is to meet increased demand on our services while the resources available to us substantially reduce by 2011. In effect, we need to do much more with less as we respond to the current economic climate and the needs of our customers. “In the current difficult economic climate, it is more important than ever that HMRC helps and supports customers fulfil these obligations while relentlessly pursuing those who bend or break the rules.” Alistair Darling said in the Budget last week that people earning more than £150,000 a year would see their tax rise from 40 per cent to 50 per cent, prompting threats by some that they would move to a lower-tax country and fears that the accountants of others may become more creative. Yesterday's HMRC business plan marked the first time that the Revenue has broken down its spending. It revealed that 21 per cent of its £4 billion annual budget is spent