Issue(s)

Improving operations and programme delivery

Financial management

Parent department

HM Revenue & Customs (HMRC)

HM Treasury (HMT)

Related documents

The effective management of tax reliefs (Nov 2014)

Tax reliefs (Mar 2014)

Increasing the effectiveness of tax collection: a stocktake of progress since 2010 (Mar 2015) - including a link to a database of HMRC's responses to PAC recommendations since 2010

Our work on tax reliefs in 2014 broke new ground regarding the level of accountability needed for these important policy mechanisms. Our work illustrated that reliefs are material to the UK's fiscal position, but there is no consistent approach to introducing or modifying these. We recommended that HM Revenue & Customs (HMRC) develop a methodology for identifying similar reliefs and the level of administration needed for each type.

Impact: HMRC and HM Treasury both agreed they have responsibility for evaluating whether reliefs are achieving their aims and for assessing their costs and benefits. We saw examples of good practice emerging. HMRC uses specialists to monitor patent box relief and is developing new techniques to respond quickly to analyse any changes in its use. We have encouraged HMRC, with HM Treasury, to determine an appropriate level of administration for tax reliefs in proportion to risk.