The government must stop “dragging its feet” and curb the use of offshore tax havens, opposition politicians say.
Their criticism comes after a leak of financial papers from Bermuda revealing the secret investments of the rich and famous, including the Queen.
Sir Vince Cable said British overseas tax havens were a “bizarre anomaly”.
Shadow Chancellor John McDonnell said people “would be outraged” by the scale of tax avoidance.
The premier of Bermuda said the investments were legal, and the UK bore ultimate responsibility for the rules.
On Sunday BBC Panorama broadcast the results of its year-long investigation into the Paradise Papers, a massive leak of financial documents from Bermuda-based law firm Appleby.
Liberal Democrat leader Sir Vince criticised the government for not clamping down on offshore tax havens trading under the British flag.
Labour’s John McDonnell said a public inquiry into the use of offshore tax havens was needed, as well as a new enforcement team in HM Revenue and Customs to tackle offshore investments.
“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,” he said.
Labour MP for Tottenham David Lammy said constituents “struggling to make ends meet” had every right to be furious at the revelations.
“I’m sick and tired of promises but no action – we are seeing tax avoidance on an industrial scale and it is the poorest who pay the price,” he added.
The documents have raised questions over the investments of Conservative Party donor Lord Ashcroft, Everton FC owner Farhad Moshiri, and offshore investments made on the Queen’s behalf by the Duchy of Lancaster.
Sir Vince, a former business secretary, said: “The Paradise Papers suggest that a small number of wealthy individuals have been able, entirely legally, to put their money beyond the reach of the Exchequer.”
Sunday’s edition of Panorama reported that former Conservative Party chairman Lord Ashcroft remained a non-dom, and continued to avoid tax despite attempts to make peers pay their full share.
The leaked documents show that between 2000 and 2010, Lord Ashcroft received payments of around $200m (£150m) from his offshore trust in the Bermuda.
Lord Ashcroft said he would not comment on the allegations because of the way he had been treated by BBC Panorama in the past.
Sir Vince 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 also criticised former Prime Minister David Cameron, after the government backed down from developing a company register for British overseas territories.
He said: “David Cameron was initially attracted to the idea [of a register], but when the overseas territories said on a visit to London that they were against it, he backed down.”
Mr McDonnell has called for a full register of companies, who owns them and who the beneficiaries are to see how much tax is being lost through offshore tax havens.
The Paradise Papers puts into question the practise of using highly secretive offshore tax havens, which is legal.
The premier of Bermuda David Burt said Bermuda has a “robust regulatory regime” and it has had the same tax system since 1898. He added the UK’s tax law allows the use of offshore tax havens.
Mr Burt said: “Bermuda cannot make a change to its laws to address the challenge of what you are looking at, what you are discussing is the United Kingdom law.
“There is nothing that has been found that is illegal or contrary to law.”