Millions of files of financial documents obtained by a German newspaper, dubbed Paradise Papers, revealed how individuals and businesses, including £10m from the Queen’s private estate, put money in offshore financial investments.
It found the Duchy of Lancaster, which provides the Queen with an income and handles her £500m private estate, had made investments offshore, including funds in the Cayman Islands and Bermuda. Both territories have no corporation tax.
Labour’s Dame Margaret Hodge - chair of the all-party parliamentary group on responsible tax - told BBC Breakfast that the government should take action.
She said: “If we want a fairer society, we have to close down on our tax havens.
“As long as they exist the super rich and big corporations will chose to hide their money, avoid taxes and we won’t have anybody giving according to their wealth, or according to their income, into the common pot for the common good.”
She called on HMRC to be “more aggressive”.
The 13.4m documents, mostly from a firm called Appleby, which provides legal services and helps clients set up offshore investments with low or zero tax rates.
Former Conservative party deputy chairman Lord Ashcroft may also have ignored rules around his offshore investments and how they were managed.
The documents revealed that between 2000 and 2010, he received payments of around $200m (£150m) from his offshore trusts in Bermuda.
Sir Vince Cable, former business secretary, said Conservative donors had benefited from these arrangements and a select committee should be set up to investigage this.
He said: "Given these revelations, including news that Conservative donors benefited from these arrangements, we need a parliamentary select committee to investigate fully who decided what and why."
He criticised former Prime Minister David Cameron for backing down from developing a company register for British overseas territories.
Labour’s shadow chancellor John McDonnell said a public inquiry into the use of offshore tax havens was needed, along with a new enforcement team in HM Revenue and Customs to tackle investments made overseas.
He said: “What this government is doing is dragging its feet on this...These [tax havens] are legal methods, that’s why we need to change the law to make sure they comply with what we expect, which is for people to pay their taxes.”
McDonnell also called for a full register of companies, including who owns them and who the beneficiaries were in order to find out how much tax is being lost through offshore tax havens.
Unions UNISON and PCS also called on the government to act and bring forward changes immediately, including changes in the Budget and HMRC cuts to be reversed to tackle tax avoidance.
Dave Prentis, UNISON general secretary, said: “People will be shocked and angry to learn that the British establishment has been systematically squirrelling away money offshore.
"By stashing the cash in tax havens, they’ve been depriving the British people of much-needed funding for schools, hospitals and care homes.”
Mark Serwotka PCS general secretary said HMRC staff has halved in the past few years, resulting in the loss of thousands of tax inspectors across the country.
He said: “One practical step the government could take is to immediately halt the HMRC office closure programme.
“To continue with these closures and the subsequent loss of more experienced staff would indicate they have no interest in tackling these vital issues. We urge the government to halt the closure programme immediately.”
The Duchy of Lancaster said there was no sign of illegal investments on behalf of the monarch.
But questions have been raised about whether the royal family should be investing offshore, the BBC reported.
The leaks also showed that the Duchy made small investments in the rent-to-buy retailer BrightHouse and the Treshers chain of off-licences, which went bust owing £17.5m in tax and costing almost 6,000 people their jobs.
The Duchy said it had not been involved in decisions made by funds nor had it had any tax advantages from its actions. There is nothing suggesting the Queen was aware of the specific investments made on her behalf, the BBC said.
In response to the leak, the BBC reported, the legal service provider Appleby said it did not “tolerate illegal behaviour” and was “satisfied that there is no evidence of any wrongdoing, either on the part of ourselves or our clients”.
German newspaper Süddeutsche Zeitung obtained the 13.4m files from two offshore service providers with the company registries of 19 tax havens. It was given to and shared by the International Consortium of Investigative Journalists with partners including the Guardian, the BBC and the New York Times.