Tax justice has a cost – and it’s a price worth paying

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As many papers report, it’s been discovered that more than 10 million people may be in line for a tax rebate due to errors in the HM Revenue and Customs tax code system whilst nearly 6 million people in the UK have paid the wrong amount of tax in the past two years, with some facing bills of up to £5,000.

It’s claimed that the problems arose because at the end of each year HMRC manually checked that the amounts deducted in tax and national insurance by employers using the PAYE system match up with the information held on their records. Those checks have now been, at least partly, computerised.

There will, of course be howls of protest — not least from those saying they do not want to pay and it’s not their fault they have to. That’s nonsense. You will hear no such protest from those receiving a refund.

The truth is multifold.

The first is you can’t get decent IT on the cheap — and this has been tried for too long.

Second is you can’t run a tax system without enough people — whether you have the right IT or not.

The third is that if people don’t want to submit annual tax returns then they have to accept this risk.

Fourth, cuts now will only exacerbate this problem in the future.

The reality is that this tax is due — and the vast majority of those who owe it know that and have been trying to get away without paying for too long. No one with a company car not paying tax on it is innocent: everyone knows tax is due on them, and this is by far the most common cause of the underpayments. I have little sympathy for them: I do with those who have overpaid — but research has always shown people like tax rebates and would prefer getting them than to risk underpaying.

But the deeper reality is that tax is key to the relationship between a subject and the state in the UK — and running tax on the cheap is, has been and will be a mistake. Tax justice demands we invest in the process of tax collection. We must do so now.

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