Caroline Nokes, the immigration minister, has been accused by MPs of either not having a grip on her department or being recklessly incompetent for allowing the use of counter-terrorism powers to force the removal of highly skilled migrants from the UK over their taxes.

In a Westminster Hall debate called by the SNP’s Alison Thewliss, MPs spoke about constituents including teachers, doctors, lawyers and engineers who are facing expulsion from the UK under paragraph 322(5) of the immigration rules for making minor and legal amendments to their tax records.

“This is highly inappropriate … regimented, calculated decision-making,” said Thewliss, the MP for Glasgow Central. “None of those whom I have spoken to have any issues which would cause them to be considered a threat to national security.

“A substantial number of refusals appear to be predicated on nothing more than the individual making an honest mistake – and as far as HMRC are concerned, when the correction has been made, the case is closed. Some of the sums involved in these corrections are only a few pounds, and often this was several years ago.”

There are believed to be at least 1,000 people, some of them working in professions listed by the government as facing shortages, who are fighting removal under the controversial paragraph.

“It seems odd to me that HMRC could be satisfied but that the Home Office should treat the same behaviour as being akin to deception at the least and terrorism at worst,” Thewliss said. “The Home Office should consider carefully the impact of their target-driven culture on the wider economy, especially given the uncertainty of Brexit.”

The Lib Dem MP Ed Davey said a number of his constituents had been forced into destitution by the paragraph, and the Home Office’s decisions around taxes were so “nonsensical” that it should be stripped of these powers. “They don’t have any idea,” he said.

Stephen Doughty, a Labour member of the home affairs select committee, which has repeatedly questioned the Home Office about its use of paragraph 322(5), said: “What this scandal shows is a widespread, systematic problem in the Home Office. It shows the ministers do not have a grip on their department.”

Another Labour MP, Lyn Brown, said a heavily pregnant constituent had been told to pay a £9,000 NHS bill or face removal from her GP list after being served with a 322(5). Brown said the Home Office was guilty of “bad and disgusting treatment” of highly skilled migrants.

“It’s hard to look at these cases and not conclude that the government is chasing arbitrary immigration targets without a sense of decency,” she said.

Labour’s Stephen Timms referred to a recent admission by the health secretary, Jeremy Hunt that he had forgotten to declare luxury flats he owns to HMRC. Hunt was given no sanction after dismissing the omission as an “honest administrative error”. Timms said: “We can’t have one rule for cabinet ministers and affluent people and a completely different set of rules for our constituents.”

Nokes said the first phase of a review of the issue had looked at 281 uses of 322(5) and found it had been used correctly in all cases. The second phase, assessing a further 1,671 cases, will be concluded shortly.

She failed to respond to MPs’ demands that the Home Office restore the right to work, use the NHS and rent property to those refused a visa under 322(5), and to pay compensation for loss of earnings.

The paragraph in question gives the Home Office the discretionary right to deport migrants “in the light of his conduct … character or associations or the fact that he represents a threat to national security”. It mentions nothing about taxes. Instead, the examples it lists are linked to terrorism, war crimes and repeated, deliberate and serious criminality.

After the Guardian highlighted numerous cases in which the power was being misused, the Home Office promised a pause in its use of 322(5) pending the conclusions of the review.

On Monday it was revealed that highly skilled migrants were still being dragged through the courts in what MPs said “smacked of a government department unjustly and incorrectly misusing a draconian power” and “shamelessly ruining innocent people’s lives”.