Twelfth Report: Management of tax reliefs

Select Committee

Public Accounts Committee HC 379 20 July 2020

Report Status Government responded

Conclusions & Recommendations 30 items (14 recs)

Source View on Parliament website

Government Response (AI assessment · 29 of 30 classified)

Accepted 18

Accepted in Part 5

Acknowledged 2

Not Addressed 2

Rejected 2

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Twelfth report from Session 2019-21 · published 25 Mar 2021

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Recommendations & Conclusions

3 results

2 Recommendation Not Addressed

HMRC and HM Treasury are insufficiently curious about the impact of some key tax reliefs...

Recommendation

HMRC and HM Treasury are insufficiently curious about the impact of some key tax reliefs on different groups. Data on who benefits from tax reliefs are crucial to understanding whether they are achieving their intended objectives and to informing decisions … Read more

Government Response Summary

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.

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16 Conclusion Not Addressed

We asked the exchequer departments when they would take action on the issue of workers...

Conclusion

We asked the exchequer departments when they would take action on the issue of workers not receiving pension tax relief.27 HM Treasury said the Government recognises the different impacts of the two systems of paying pension tax relief on pension … Read more We asked the exchequer departments when they would take action on the issue of workers not receiving pension tax relief.27 HM Treasury said the Government recognises the different impacts of the two systems of paying pension tax relief on pension contributions for workers earning below the personal allowance. It referred to the Government’s announcement in Budget 2020 that a call for evidence would be published in spring 2020 on this subject. The call was due to ask for views on how to address the different pension outcomes for lower earners, depending on whether their employer’s pension scheme used the net pay or relief at source method of tax relief on their pension 21 HMRC, Capital Gains Tax statistical tables, August 2019, Table 4 22 Budget Speech 2020, available at https://www.gov.uk/government/speeches/budget-speech-2020 23 Q51 24 HMRC, Personal pensions: contribution and tax relief statistics, October 2019 25 Written Evidence MTE0003 – Management of tax reliefs, Ruari Grant (Senior Public Affairs Associate, Standard life Aberdeen) published 10 June 2020 26 Royal London, New FOI reveals far more low-paid workers missing out on pension tax relief than previously thought, April 2019 27 Q49 12 Management of tax reliefs contributions.28 HM Treasury told us that in the light of COVID-19 the Government was considering the publication of this and other Government documents on a case by case basis. It planned to provide more information on the timeframe for publication of this call for evidence in due course.29 28 Net pay is where the employer takes pension contributions from an individual’s pay before it is taxed. Relief at source is where the employer takes pension contributions after tax and National Insurance has been taken from an individual’s pay. 29 Q 49, Letter from Beth Russell, Director General, Tax and Welfare, HM Treasury, 26th June 2020 and HMRC, Guidance – Pension schemes newsletter 118, March 2020; and HMG Workplace pensions Management of tax reliefs 13 Show less

Government Response Summary

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.

HM Treasury

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29 Conclusion

The cap was due to be introduced in April 2020, which would have given companies...

Conclusion

The cap was due to be introduced in April 2020, which would have given companies until 2022–23 to make claims under existing rules. HMRC estimated that the proposed changes would have saved the Exchequer around £45 million a year. However, … Read more

HM Treasury

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