Twelfth Report: Management of tax reliefs

The government states it 'agrees with the Committee’s recommendation' but then provides a response entirely focused on pandemic contingency planning, PPE supply chains, and business support measures, completely failing to address the recommendation about assessing and publishing data on beneficiaries of tax reliefs.

The government agrees with both recommendations. For HMRC publishing a list of reliefs with behavioural objectives, the target date is Autumn 2021, with plans to explore the best way to collate this information. For HM Treasury identifying behavioural objectives and measurement in Budget documents (TIINs), the government aims to ensure this happens for new or amended tax reliefs by Autumn 2020 and will measure impact through monitoring and evaluation.

The government agrees with the recommendation. HMRC will expand commentary on cost variances and their reasons in the 2020 statistical publication and publish more information on initial forecast estimates for high priority non-structural tax reliefs starting in October 2020, explaining where comparisons are not feasible.

The government accepts that HMRC will publish results of internal and external evaluations, with a more structured program for internal analysis starting in 2021. However, it rejects the recommendation for HM Treasury to publish an annual report on value for money assessments, stating these are confidential policy advice to Ministers.

The government agrees to explain how it will accelerate its response to problems with tax reliefs, stating it already keeps them under review and takes action. It further commits to setting and publishing criteria for evaluating tax reliefs and considering indicators to enhance understanding of their value.

The government acknowledges the committee's introductory statement about taking evidence from HM Treasury and HMRC based on a National Audit Office report.

The government agrees to establish and publish criteria for evaluating tax reliefs by December 2020, but rejects the recommendation to evaluate pension tax reliefs within 12 months, stating it is not the right time for a formal evaluation.

The government recognises the importance of transparency and commits that HMRC will implement a more structured programme of internal evaluation work in 2021, with plans to start publishing this analysis from the same year.

The government states HMRC will continue to publish external evaluations and include relevant internal findings in consultation documents, and will implement a structured programme to publish internal analysis from 2021, subject to ministerial approval.

The government disagrees with the Committee's concerns regarding pension tax relief, citing previous consultations, and states it is not the right time for a formal evaluation, though it will continue to engage with stakeholders.

The government rejects the recommendation for a full external evaluation of pension tax relief, citing previous consultations and ongoing stakeholder engagement, and stating it is not the right time for a formal evaluation.

The government agrees with the committee, and HMRC will improve accessibility of data in its statistics and publicly report more information on beneficiaries of significant non-structural tax reliefs by the end of 2021, subject to data availability.

The government agrees, and HMRC will improve the accessibility of its statistics and publicly report more information on beneficiaries of significant non-structural tax reliefs by the end of 2021, where data is available, acknowledging limitations for some reliefs like VAT on new dwellings.

The government accepts the recommendation for HMRC to publish data showing who benefits from pension tax reliefs by December 2021, though it notes limitations due to insufficient data for all protected characteristics.

The government agrees to publish available data showing who benefits from pension tax reliefs by December 2021, acknowledging data limitations but committing to work towards improving published information.

The government reiterates its recognition of the different impacts of pension tax relief systems for lower earners and refers to its Budget 2020 announcement of a call for evidence, without providing new information or an updated timeframe.

The government accepts the recommendation and will explore the best way to collate and publish the objectives of non-structural tax reliefs throughout 2021, with a target implementation date of Autumn 2021.

The government accepts the recommendation and will explore the best way to collate and publish the objectives of non-structural tax reliefs throughout 2021, with a target implementation date of Autumn 2021.

The government accepts the recommendation and will explore the best way to collate and publish the objectives of non-structural tax reliefs throughout 2021, with a target implementation date of Autumn 2021.

The government accepts the recommendation, committing to HMRC publishing external evaluations and internal findings in consultation documents, and initiating a structured internal evaluation program from 2021, with a target implementation date of December 2021.

The government accepts the recommendation, stating that HMRC will expand commentary on the variance of high priority non-structural tax reliefs over time in its 2020 statistics and plans to publish more information on initial forecast estimates from October 2020.

The government agrees and states that HMRC will expand commentary on cost variance in 2020 statistics and plans to publish more information on initial forecast estimates for high priority non-structural tax reliefs starting October 2020.

The government accepts the implied recommendation to address forecast variances by expanding commentary on costs and publishing more information on initial forecast estimates in its tax relief statistics, starting October 2020.

The government agrees with the recommendation, and HMRC will expand commentary on cost variances over time for high priority non-structural tax reliefs in its 2020 statistics, and publish more information on initial forecast estimates starting in October 2020.

The government partially accepts, committing to HMRC publishing external and internal evaluations from 2021, but rejects publishing HM Treasury's value for money assessments due to their confidential nature as policy advice, while also committing to consider developing a robust value for money methodology.

The government agrees to accelerate response times for tax reliefs, stating it already keeps them under review and takes action, but also committing to set and publish criteria for evaluating tax reliefs and consider indicators to improve understanding of their value.

HMRC recognizes the importance of publishing more information to aid understanding of tax reliefs and states it already publishes statistics on various reliefs. It notes that evidence from its statistics and a 2017 evaluation of Entrepreneurs’ Relief informed changes in the 2018 and 2020 Budgets.

The government outlines existing steps taken to combat abuse of R&D tax relief, including using ‘spotlights’ to warn of concerns, increasing compliance staff by 100 FTE, requiring CT600 forms with tax computations from April 2019, and engaging with the R&D Consultative Committee.

The government reiterates its actions to combat abuse and poor-quality R&D claims, including using ‘spotlights’ for warnings, increasing compliance staff by 100 FTE, implementing new CT600 filing requirements from April 2019, and regular engagement with the R&D Consultative Committee.