Nearly 12 million Britons could have £841 million wiped off their long-term investments by a stealth tax.
Savers who hold endowments and whole-of-life plans at companies including Axa, Aviva, Prudential and Standard Life are likely to be affected.
The tax, which came into effect this month, means that every penny earned on these policies as an annual return will be subject to corporation tax at 19 per cent.
Previously, annual profits were taxed only if they were higher than the rate of inflation.
The chancellor had claimed that the change would have “no impact on individuals or households”.
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However, a leaked letter from the Treasury disclosed that the measure would affect ordinary investors.
“This impact will depend, amongst other things, on the amount of money policy holders have invested,” the letter from a Treasury official to a taxpayer said.
Companies face a bill of £841 million over the next five years, twice the amount outlined by the Treasury, according to the Association of British Insurers.
Experts believe this could be passed on to customers.
As the measure is in the Finance Bill, Steve Webb, director of policy at Royal London, called for parliament to revisit it. “MPs have clearly been misled,” he said. A Treasury spokesman said the change was to “correct an imbalance”.