Too little tax?

September 09, 2010, 11:08 PM GMT+0

In the wake of the news that the Inland Revenue has mistakenly undercharged millions of people in income tax, two thirds of the British public are of the opinion that people should not have to pay back the shortfall in tax, as it was not the individuals’ fault and would therefore be unfair.

HM Revenue and Customs (HMRC) recently calculated that 1.4 million people have paid too little income tax, and the Government is determined to get the missing money back. While the Inland Revenue announced today that only those with more than £300 to pay will have to foot the bill, the outstanding balance has been calculated at an average of £1,430 per underpaying taxpayer and will need to be paid over a maximum of three years.

However, our recent survey has revealed that 65% of the public disagree that it is up to taxpayers to pay back the shortfall. Respondents instead felt that the mistake was the fault of the Inland Revenue, meaning that it is ‘unfair to leave people with large back payments’.

Full share of tax

Indeed, David Gauke, the Treasury Secretary, blamed flaws in the PAYE (Pay-As-You-Earn) system used to calculate income tax for the blunder. Notwithstanding, the Government still maintains that the recovery of the funds is crucial.

In fact, 28% of those asked did agree that although this loss in tax revenue is ‘not the fault [of the people affected]’, they should still pay back the funds, as ‘everyone should pay their full share of tax’.

Survey details and full results