HMRC has been using behavioural psychology to nudge taxpayers into settling disputes with the taxman, a legal professional has warned.

Adam Craggs, head of City law firm RPC, said ‘nudge’ letters have been sent directly to clients to put pressure on the taxpayer, whereas previously HMRC sent correspondence to client’s lawyers or advisers who represent them.

Taxpayers find the letters intimidating, he said, adding that sending such letters directly to clients would be seen as applying undue pressure in any other area of litigation.

Mr Craggs added: “It demonstrates how far HMRC is prepared to go in an attempt to persuade taxpayers not to pursue their dispute.”