A Watford MP has defended some of his constituents who he says were given poor tax advice and left owing “astronomical” figures to the Government.

Richard Harrington spoke before the House of Commons about people from Watford facing huge repayments and even bankruptcy since the Treasury Minister took a stronger stance on tax avoidance.

Mr Harrington said at least 160 people in the town had been contacted by Her Majesty's Revenue and Customs (HMRC) about the Loan Charge and that he was aware of one case where someone owed close to £250,000.

Some are even facing homelessness, he said.

The Loan Charge, a policy to ensure users of tax avoidance loan schemes pay their share of tax, applies to disguised remuneration loans that are outstanding.

Speaking to the House Mr Harrington said: “In Watford, at least 160 people have been contacted by HMRC which makes my community one of the ones worst hit.

“It’s clear from speaking to my constituents this is putting immense mental and personal strain on them.

“The impact of the way HMRC is imposing this charge is greatly concerning. Whilst I commend this Government’s record on tackling tax evasion the way HMRC is going about this is grossly unjust.

“My constituents are decent, ordinary, hardworking people who are facing huge bills that will render them bankrupt in most cases.

“Many people have said their accountants advised these schemes were completely legal and how employers encouraged employees to use them.

“They acted in good faith, thinking they were acting legally and are now being penalised for following this advice. In many cases, these accountancy firms are still in operation and have not been penalised, whilst my constituents suffer greatly. This can’t be right.”

Mr Harrington asked that the Loan Charge be put on hold until the extent of its impact is fully investigated.