DURING many months we have highlighted how a malfunctioning tax credit system has plunged families into debt.

A York barmaid earning £79 a week was told she owed the taxman £5,000. A young Malton family was hit with a demand for more than £2,300.

In York alone, 5,800 families were being asked to pay back an average of nearly £1,000.

This is State incompetence on a mass scale. But the Inland Revenue was loftily dismissive of the problems. It offered no apology and no explanation.

It will be far harder for the taxman's political masters to dodge the flak from two damning reports today. National charity Citizens Advice slammed the tax credit system as riddled with "completely unacceptable" errors.

The report revealed that people have been threatened with repossession or eviction. Citizens Advice Bureaux advisers have even had to arrange Salvation Army food parcels for families left without enough money to eat.

This is the ultimate condemnation: a project designed to lift families from poverty has left some near destitute.

Parliamentary Ombudsman Ann Abraham's verdict is equally scathing: tax credit blunders can have "harsh and unfair consequences for vulnerable people," she says.

Both reports call for the Government to write off these debts. That is precisely what would happen if a private organisation made a similar error.

A debt amnesty is the only fair solution. And the £2 billion penalty may even pierce the unaccountable arrogance shielding the Inland Revenue.

Updated: 11:18 Wednesday, June 22, 2005