In his Spending Review, Chancellor George Osborne said the investment would help reclaim £7bn in taxes lost through fraud and avoidance owed to the public purse.

Revenues & Customs has faced criticism for a string of recent failings, including revelations the HMRC computer system was telling people they were owed five-figure tax refunds.

Today George Osborne also announced a much tougher approach to tax avoidance by banks, after it emerged only four out of the 15 biggest banks operating in Britain have signed up to a code of conduct.

Individuals are also being targetted over avoidance. Last month HMRC wrote to hundreds of wealthy UK tax payers over possible large scale tax evasion, after it acquired a list of high net-worth individuals with accounts at the Swiss division of HSBC.

However in addition to the budget boost HMRC must also find 15% of efficiency savings.

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The Revenue service is currently embroiled in problems with the PAYE tax system which could continue for at least two years at a cost of £170m.