The Public Accounts Committee (PAC) has urged HMRC to publicly 'name and shame' those who sell or use tax avoidance schemes, saying the department must develop a much more robust approach to combat losses of £5bn annually.

The committee's report on tackling marketed avoidance schemes found a 'proliferation of contrived schemes' which it says exploit loopholes in legislation and abuse available tax relief schemes.

As a result, PAC says promoters are winning 'what appears to be a game of cat and mouse with HMRC' by taking advantage of the time lag between the launch of a scheme and its closure scheme by HMRC.

HMRC estimates suggest that in 2010/11 £5bn was lost to tax avoidance and that the present total tax at risk from avoidance over time is double that, at £10.2bn.

Margaret Hodge, chair of PAC, said: 'The complexity of tax law creates opportunities for avoidance, there are no penalties to stop people promoting these schemes, and HMRC is ineffective in challenging promoters who are deliberately obstructive or deliberately sell schemes they know do not work.

'There is also a lack of transparency that makes it very hard to find out who is involved in marketing or using these schemes.'

The committee was critical of HMRC's lack of detailed knowledge the level of tax avoidance non-disclosure.

The PAC investigation also suggested a small number of promoters appear determined to avoid disclosure and refuse to engage with HMRC.

The PAC said it wants to see HMRC act more quickly to investigate and close down new schemes and to take cases to court more often.

Hodge said: 'HMRC has a lot more work to do to successfully tackle tax avoidance. It needs to know how much it spends on anti-avoidance work and properly evaluate the effectiveness of its strategy. It needs to get a stronger grip on the large number of avoidance cases it is investigating and find a way to reduce them. The number of cases it litigates is tiny compared to the number of enquiries.'

Law firm CMS Cameron McKenna however said that Hodge 'does not give appropriate credit to what HMRC and the Treasury has already done to change tax behaviour'.

Richard Croker, head of tax at the firm said: 'The most obvious aspect of this is of course the GAAR, which will have an effect on the viability of offensive "avoidance" schemes. She might also consider that Graham Aaronson and his advisory committee examined the prospects for pre-clearance and concluded that it would over-stretch HMRC resources and was unworkable.'