MPs on the Loan Charge APPG have written to Chancellor Jeremy Hunt expressing concern about the tone of the letters and asking him to intervene to negotiate a resolution with taxpayers.

The letter stated: ‘We are writing to express our serious concern at the wave of demands in the form of discovery assessments issued by HMRC to many people they believe are liable for the loan charge.

‘These demands, that have come without warning, are for very significant and life-changing (and in most cases clearly unaffordable) sums.

‘On top of this, people are facing punitive daily interest additions and penalties, which is making the sums even more unaffordable.’

The loan charge is a mechanism to recover disputed income tax and National Insurance contributions from people who were involved in disguised remuneration packages which were structured to pay lower taxes than PAYE employees. Many taxpayers signed up to the schemes when HMRC had not flagged them as tax avoidance schemes.