The Public Accounts Committee (PAC) has recently opened an inquiry into the UK's management of ‘tax expenditures’ and tax reliefs provided for certain activities or goods, an area it has kept under review for the last ten years.

Tax reliefs in the UK can be split into two categories:

The committee identified that the biggest tax expenditures in the UK, which are often also the most difficult to evaluate, are:

Following a National Audit Office report in February 2020, the Committee found there is no formal framework governing the administration of tax expenditures. They expressed concern about whether tax reliefs represent value for money and are being sufficiently evaluated to see if they continue to deliver what was intended when they were first introduced.

With this in mind, the PAC invited evidence from the public about accountability and value for money in tax expenditures, the submission deadline for which was 5 June. At a meeting of the PAC on 10 June, the Committee questioned officials from HM Treasury and HMRC on these points.

HMRC reported to the committee that:

HMRC commented that to make a change to a relief stick, it sometimes required a bit of careful preparation in advance as otherwise the changes may be challenged. Sometimes this results in the change being quickly reversed.

A full report is now expected from the PAC following the inquiry.

External links

Management of tax reliefs 

Public accounts committee Oral evidence on management of tax reliefs of 10 June 2020