Tax Reliefs

Treasury Committee Closed Inquiry
Opened: 21 Jul 2022 Closed: 16 Jan 2024 Parliament page
In this inquiry, the Treasury Committee will examine the tax reliefs available to both individuals and businesses, with a focus on the overall impact of tax reliefs on the UK economy. Read the call for evidence to find out more about the inquiry
6 Recommendations
4 Conclusions
1 Report
7 Letters
4 Events
Activity timeline 13 events
18 Oct
2023
Report published
26 Jul
2023
Report published
13 Jul
2023
Correspondence
13 Jul
2023
Correspondence
12 Jul
2023
Correspondence
12 Jul
2023
Correspondence
14 Jun
2023
Formal meeting (oral evidence session) · The Grimond Room, Portcullis House
17 May
2023
Formal meeting (oral evidence session) · The Grimond Room, Portcullis House
29 Mar
2023
Correspondence
13 Mar
2023
Correspondence
13 Mar
2023
Correspondence
1 Mar
2023
Formal meeting (oral evidence session) · The Grimond Room, Portcullis House
Title HC No. Published Items Response
Twentieth Report - Tax Reliefs HC 723 26 Jul 2023 10 Responded
Recommendations & Conclusions
7 results
Clear
2 Recommendation Rejected
Twentieth Report - Tax Reliefs
Undertake comprehensive review of existing tax reliefs for simplification and ease of adherence.
We recommend that the Government undertake a comprehensive and systematic review of existing tax reliefs to look for opportunities for simplification. In doing so, they should in particular look for ways of making it easier for taxpayers to adhere to … Read more
Government Response
The government rejects the recommendation for a comprehensive and systematic review of tax reliefs, arguing it would not be an effective use of resources and would create significant uncertainty. It states it is already committed to simplifying the tax system and keeps all tax reliefs under review.
HM Treasury
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4 Recommendation Rejected
Twentieth Report - Tax Reliefs
Publish cost data for all tax reliefs from the 2025/26 tax year onwards
There are 1,180 tax reliefs, but HMRC only publishes estimated cost data for 365, leaving 815 uncosted. We recommend HMRC publish cost data for all tax reliefs from the 2025/26 tax year onwards.
Government Response
The government agrees on the importance of publishing tax relief data but rejects publishing cost data for all reliefs. It argues that for many structural reliefs, the data is unavailable or would impose disproportionate burdens on taxpayers, and highlights significant progress in costing non-structural reliefs.
HM Treasury
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5 Recommendation Rejected
Twentieth Report - Tax Reliefs
Reclassify tax reliefs as Government expenditure to enable value for money assessments
We recommend the Treasury reclassify tax reliefs as Government expenditure. This would subject reliefs to established value for money assessment, leading to improved scrutiny and ultimately better policy.
Government Response
The government rejects reclassifying tax reliefs as government expenditure, stating that existing parliamentary scrutiny and Green Book principles via the Joint Tax Relief Framework are sufficient, and such reclassification is unnecessary and inappropriate given the qualitative difference between tax and spend.
HM Treasury
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6 Recommendation Rejected
Twentieth Report - Tax Reliefs
Ensure relevant departments take responsibility for budgeting non-structural tax reliefs with Treasury oversight
We recommend that Government consider how to ensure that the relevant delivery department takes more responsibility for the budgeting for each non-structural tax relief, those designed to promote particular behaviours, in conjunction with the Treasury. This would be intended to … Read more
Government Response
The government rejects the recommendation for delivery departments to take more responsibility for budgeting non-structural tax reliefs, stating that existing parliamentary scrutiny, Green Book principles, and the Joint Tax Relief Framework are sufficient, and that tax reliefs are qualitatively different from spending.
HM Treasury
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8 Conclusion Rejected
Twentieth Report - Tax Reliefs
No routine process exists to identify and remove outdated tax reliefs from statute
Political pressure, including through lobbying, tends to promote both the creation of new tax reliefs and the retention of existing reliefs. Tax reliefs long detached from their original policy purpose clutter an ever more complex tax system. We are concerned … Read more
Government Response
The government is already committed to simplifying the tax system and keeps all tax reliefs under review. They do not feel a review of the kind recommended by the Committee would be an effective use of limited resources, saying constant reviews would essentially be creating uncertainty for taxpayers.
HM Treasury
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9 Conclusion Rejected
Twentieth Report - Tax Reliefs
Five-yearly reviews identified as optimal system to remove outdated tax reliefs
We have taken evidence on several options for seeking to remove outdated tax reliefs from the statute book. A “one in, one out” rule for tax reliefs would be a blunt instrument which could reduce flexibility in policy-making. Sunset clauses … Read more
Government Response
The government rejected the recommendation for a formal five-yearly review system for tax reliefs, stating it already keeps tax reliefs under review and that such a system would be an ineffective use of resources and create uncertainty for taxpayers.
HM Treasury
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10 Recommendation Rejected
Twentieth Report - Tax Reliefs
Institute five-yearly reviews with public consultation for tax reliefs, committing to remove ineffective ones
We recommend that the Government institutes a system of five-yearly reviews, incorporating public consultation, for tax reliefs. Where these reviews find tax reliefs which no longer achieve policy objectives, are vulnerable to abuse, or have estimated costs significantly higher than … Read more
Government Response
The government rejects instituting a system of five-yearly reviews for all tax reliefs, arguing that extensive existing monitoring by HMRC, annual Finance Bill processes, and previous evaluations already achieve the objective of scrutiny, and that the proposed system would create undesirable uncertainty for taxpayers.
HM Treasury
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Government Response AI assessment · 10 of 6 classified
Accepted 2
Acknowledged 1
Rejected 7
Total 6 recs + 4 conclusions
Correspondence 7 letters
13 Jul 2023 Correspondence from the Director General, Customer Strategy and Tax Design, HM Revenue and Customs, relating to oral evidence provided to the Committee on 17 May, dated 7 June
Parliament page
13 Jul 2023 Correspondence from the Director General, Customer Strategy and Tax Design, HM Revenue and Customs, relating to tax relief evaluation, dated 31 May
Parliament page
12 Jul 2023 To committee Letter from the Chair to the Financial Secretary and Economic Secretary to the Treasury relating to Tax Reliefs, dated 21 June
Parliament page
12 Jul 2023 To committee Letter from the Financial Secretary and Economic Secretary to the Treasury to the Chair relating to Tax Reliefs, dated 30 June
Parliament page
29 Mar 2023 Correspondence from the Chancellor of the Exchequer, relating to the Office of Tax Simplification, dated 20 March
Parliament page
13 Mar 2023 Correspondence from the Chair to the Chancellor, relating to the Office of Tax Simplification, dated 2 March
Parliament page
13 Mar 2023 Correspondence from the Office of Tax Simplification relating to the session on Tax Reliefs on 1 March, dated 7 March
Parliament page