Source · Select Committees · Treasury Committee
Recommendation 4
4
Rejected
Paragraph: 26
Publish cost data for all tax reliefs from the 2025/26 tax year onwards
Recommendation
There are 1,180 tax reliefs, but HMRC only publishes estimated cost data for 365, leaving 815 uncosted. We recommend HMRC publish cost data for all tax reliefs from the 2025/26 tax year onwards.
Government Response Summary
The government agrees on the importance of publishing tax relief data but rejects publishing cost data for all reliefs. It argues that for many structural reliefs, the data is unavailable or would impose disproportionate burdens on taxpayers, and highlights significant progress in costing non-structural reliefs.
Paragraph Reference:
26
Government Response
Rejected
HM Government
Rejected
The Government shares the Committee’s view that collection and publication of data on tax reliefs, particularly non-structural reliefs, is essential to inform proper policy making and accountability. HMRC already publishes an extensive range of costings and impact evaluations for tax reliefs and will look to expand on these wherever possible without adding significant new reporting burdens on businesses and individuals that would be disproportionate to any benefits that might arise. The majority of reliefs (841 of 1,180) are structural—establishing the scope/base of a tax (e.g. income tax personal allowance)—meaning many specifically keep individuals and businesses out of tax. Such reliefs are generally neither controversial or problematic. HMRC publishes detailed annual commentary on the most significant non-structural reliefs (those that cost over £500m a year). This includes: • Distributional analysis for 30 of the 36 largest reliefs, where data is available; • Cost trends over time for 12 of the 36 largest reliefs where the original forecasts overlapped with the period considered by the release. If these costs varied from forecasts, HMRC also explains why. For most reliefs where HMRC does not currently publish an estimated cost, the information required to do so is not available. In large part, this is because many reliefs are specifically designed so that people who do not owe any tax are not required to engage with the tax system to claim the relief. Reversing this position to obtain the information required to estimate cost would place considerable additional new burdens on businesses and individuals that the Government does not feel proportionate or warranted, and would increase complexity in the tax system. Greater evaluation of structural reliefs would offer limited benefits to justify the additional burdens on taxpayers. For non-structural reliefs (those with a specific behavioural policy aim) HMRC has made significant progress in publishing data on estimated costs, investigating 301 and publishing costings for 252. Of the remainder, costings for 22 reliefs could not be published as data is not available, while publishing data for 27 would be disclosive of the affairs of identifiable taxpayers.