Source · Select Committees · Treasury Committee
Recommendation 7
7
Accepted
Monitor maintained tax reliefs for abuse indicators, including external consultation on policy design
Recommendation
Tax reliefs have been abused. The most straightforward way to reduce opportunities for such abuse is to simplify the tax system. Where tax reliefs are maintained, we recommend the Government monitor them for indications of abuse as part of ongoing review processes. The Government should seek and favour external consultation on potential abuse at both policy design and post-implementation monitoring phases. (Paragraph 37) 18 Tax Reliefs Removing reliefs from the statute book
Government Response Summary
The government states it already meets the recommendation, affirming it takes abuse seriously and actively monitors tax reliefs. It details existing processes including inter-departmental collaboration, seeking external consultation, continual monitoring of costs and take-up, and using various tools to address abuse.
Government Response
Accepted
HM Government
Accepted
The Government takes abuse of tax reliefs extremely seriously and already acts to tackle abuse of tax reliefs whenever it occurs and considers that it already meets this recommendation. During the policy making process HMT and HMRC work together closely, through the Policy Partnership, to ensure known risks from fraud and error are addressed. As part of the policy making process, the Government actively seeks views from external stakeholders, including tax experts and industry, to help understand how proposals will work in practice and opportunities for improvement. As tax reforms are implemented, including new or amended reliefs, HMRC continually monitors changes in take-up and costs as part of tax administration. This analysis empowers HMT and HMRC to make timely and informed decisions where there are deviations from trends or indications of abuse, avoidance, or unintended behaviours, as well as direct its resources to build further evidence in the future. As the tax authority, HMRC uses a range of tools to intervene appropriately depending on the risk, from raising awareness to increasing compliance resource. Where necessary, the Government considers legal reform as part of the policy making process.