The National Audit Office (NAO) has published a report finding that many tax reliefs, cost more than expected and are used in ways either not intended by Parliament, or without bringing about the intended behaviour change. In particular, entrepreneurs’ relief cost £2bn more than expected, while HMRC had previously detected large scale abuse of share loss relief in 2006/07 but did not check the total amount of claims in that year or subsequent years to check for any unexplained surges. The report, The effective management of tax reliefs (see www.bit.ly/11lsuZT), looks specifically at ten reliefs and follows an initial review of tax reliefs published in March 2014.
Following the release of the report, Amyas Morse, head of the NAO, said: ‘HM Treasury and HMRC do not keep track of tax reliefs intended to change behaviour, or adequately report to Parliament or the public on whether tax reliefs are expensive or work as expected. We found some examples where HMRC and HM Treasury proactively monitored and evaluated tax reliefs, but in general [they] do not test whether their aims for the reliefs are being achieved. Until they monitor the use and impact of tax reliefs, and act promptly to analyse increases in their costs, HMRC and the Treasury’s administration of tax reliefs cannot be value for money.’
PAC chair Margaret Hodge said that it was ‘beyond belief’ that HMRC had not put in place a framework or principles to guide its administration of reliefs.
HMRC, however, countered the claims, saying: ‘It is nonsense to suggest that our administration of tax reliefs loses money. We robustly monitor the implementation of reliefs, and identify and tackle abuse as a routine part of our compliance work, as we demonstrated in detecting and tackling abuse of share loss relief. We have highly-effective measures in place to ensure that tax reliefs only benefit those for whom they are intended.’
Meanwhile, HMRC released its half-yearly figures, summarising its revenue collected and customer service levels between April and September 2014, showing it brought in total tax revenues of £243.6bn in the period – about £7bn more than the same point last year – and that the number of telephone calls to customer helplines that HMRC handled increased by 1.8% to 74.5% of calls.
The National Audit Office (NAO) has published a report finding that many tax reliefs, cost more than expected and are used in ways either not intended by Parliament, or without bringing about the intended behaviour change. In particular, entrepreneurs’ relief cost £2bn more than expected, while HMRC had previously detected large scale abuse of share loss relief in 2006/07 but did not check the total amount of claims in that year or subsequent years to check for any unexplained surges. The report, The effective management of tax reliefs (see www.bit.ly/11lsuZT), looks specifically at ten reliefs and follows an initial review of tax reliefs published in March 2014.
Following the release of the report, Amyas Morse, head of the NAO, said: ‘HM Treasury and HMRC do not keep track of tax reliefs intended to change behaviour, or adequately report to Parliament or the public on whether tax reliefs are expensive or work as expected. We found some examples where HMRC and HM Treasury proactively monitored and evaluated tax reliefs, but in general [they] do not test whether their aims for the reliefs are being achieved. Until they monitor the use and impact of tax reliefs, and act promptly to analyse increases in their costs, HMRC and the Treasury’s administration of tax reliefs cannot be value for money.’
PAC chair Margaret Hodge said that it was ‘beyond belief’ that HMRC had not put in place a framework or principles to guide its administration of reliefs.
HMRC, however, countered the claims, saying: ‘It is nonsense to suggest that our administration of tax reliefs loses money. We robustly monitor the implementation of reliefs, and identify and tackle abuse as a routine part of our compliance work, as we demonstrated in detecting and tackling abuse of share loss relief. We have highly-effective measures in place to ensure that tax reliefs only benefit those for whom they are intended.’
Meanwhile, HMRC released its half-yearly figures, summarising its revenue collected and customer service levels between April and September 2014, showing it brought in total tax revenues of £243.6bn in the period – about £7bn more than the same point last year – and that the number of telephone calls to customer helplines that HMRC handled increased by 1.8% to 74.5% of calls.
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