Recommendations & Conclusions
18 items
4
Recommendation
Twelfth Report: Management of tax relie…
Accepted
HMRC cannot explain why the cost of some tax reliefs is considerably greater than government forecasts presented to Parliament. Government forecasts of the cost of tax reliefs are prepared by HMRC and scrutinised by the Office for Budget Responsibility (OBR). The costs of some new tax reliefs are double the …
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HMRC cannot explain why the cost of some tax reliefs is considerably greater than government forecasts presented to Parliament. Government forecasts of the cost of tax reliefs are prepared by HMRC and scrutinised by the Office for Budget Responsibility (OBR). The costs of some new tax reliefs are double the government’s published forecasts. For example, the research and development scheme introduced in 2013 for large companies now costs over £2 billion a year, twice what HMRC expected when it was introduced. In July 2019 the OBR concluded that the cost of tax reliefs was poorly understood. HMRC does not compare the costs of reliefs to forecasts and is therefore not well-placed to investigate the reasons for cost variances or report differences to Parliament. HMRC has committed to publicly reporting variances between the forecast and actual cost of tax reliefs. Recommendation: HMRC should, as part of its next annual statistical publication on tax reliefs due in October 2020, identify all significant cost variances within tax reliefs, and report the reasons for those variances, explaining whether variations in cost are proportionate to the impact of the relief.
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Government response AI summary
The government agrees with the recommendation. HMRC will expand commentary on cost variances and their reasons in the 2020 statistical publication and publish more information on initial forecast estimates for high priority non-structural tax reliefs starting in October 2020, explaining where comparisons are not feasible.
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HM Treasury
6
Recommendation
Twelfth Report: Management of tax relie…
Accepted
HMRC and HM Treasury are far too slow in identifying and responding to some of the most serious problems identified with reliefs, including cases of abuse. In June 2014, we found that the exchequer departments did not respond promptly to unexpected increases in the costs of tax reliefs. In March …
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HMRC and HM Treasury are far too slow in identifying and responding to some of the most serious problems identified with reliefs, including cases of abuse. In June 2014, we found that the exchequer departments did not respond promptly to unexpected increases in the costs of tax reliefs. In March 2015, we questioned whether entrepreneurs’ relief was value for money given that it was then costing £2 billion more than forecast. Despite our concerns, entrepreneurs’ relief was not fully evaluated until 2017. This evaluation found that at the point they invested only 8% of claimants reported that their behaviour had been influenced by the relief, but this finding was not acted on until the 2020 Budget. Between April 2015 and March 2019, entrepreneurs’ relief cost £11 billion. Companies with a minimal UK presence are abusing the £2 billion research and development relief for small- and medium- sized enterprises by exploiting a change to legislation made in 2012. Although HMRC identified the issue in early 2018, and is planning to introduce a new control that will restrict what companies with a limited UK presence can claim, the abuse is expected to continue to at least 2022–23, partly because of the time to identify and address the issue. HMRC estimates that the amount of money that is claimed through the relief but which would have been excluded by the latest proposed cap has risen from £70 million in 2016–17 to £130 million in 2020–21. This includes both claims that HMRC could challenge as abusive, and other claims where the exchequer was subsidising companies that were not doing research and development in the UK and which the cap would restrict. In 2019, HMRC forecast that introducing a new control on claims could save the Exchequer around £45 million a year. Officials must take the lead when problems with reliefs arise and, where necessary, quickly advise ministers about the action that could be taken. Recommendation: HMRC and HM Treasury should, within 3 months, writ
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Government response AI summary
The government agrees to explain how it will accelerate its response to problems with tax reliefs, stating it already keeps them under review and takes action. It further commits to setting and publishing criteria for evaluating tax reliefs and considering indicators to enhance understanding of …
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HM Treasury
8
Conclusion
Twelfth Report: Management of tax relie…
Accepted
The need for greater monitoring of the impact of tax reliefs was also raised with us by key stakeholders in the sector. We heard from the Chartered Institute of Taxation, which raised concerns about “the almost total lack of attention, at least so far as is visible to the outside …
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The need for greater monitoring of the impact of tax reliefs was also raised with us by key stakeholders in the sector. We heard from the Chartered Institute of Taxation, which raised concerns about “the almost total lack of attention, at least so far as is visible to the outside world, as to how effective those measures prove over time.” It also contended 7 Committee of Public Accounts, The effective management of tax reliefs, Forty-ninth Report of Session 2014–15, HC 892, March 2015 8 HM Treasury, Treasury Minutes Government responses on the Thirtieth, the Thirty Fifth, the Thirty Seventh, and the Forty First to the Fifty Third reports from the Committee of Public Accounts: Session 2014–15, July 2015 9 C&AG’s report, paras 1.5, 3.3, 3.6, Figure 14 10 Q 52 11 Qq 46–47 12 Qq 40, 63 10 Management of tax reliefs that a key part of HMRC’s policy maintenance responsibility should be making sure that tax reliefs are achieving their objectives at reasonable cost. The Institute argued that this should be undertaken as part of a programme of regular reviews which monitors their take up, the cost of the relief, and whether it is having the desired impact on behaviours.13
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Government response AI summary
The government recognises the importance of transparency and commits that HMRC will implement a more structured programme of internal evaluation work in 2021, with plans to start publishing this analysis from the same year.
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HM Treasury
9
Conclusion
Twelfth Report: Management of tax relie…
Accepted
Evaluations typically cost between £50,000 and £250,000. The NAO estimated that HMRC had spent around £2 million on evaluating tax reliefs since 2015. HMRC has an annual central research budget of £2 million per year to fund evaluations of tax reliefs and other research to inform its wider business and …
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Evaluations typically cost between £50,000 and £250,000. The NAO estimated that HMRC had spent around £2 million on evaluating tax reliefs since 2015. HMRC has an annual central research budget of £2 million per year to fund evaluations of tax reliefs and other research to inform its wider business and HM Treasury priorities.14 We asked HMRC why it spent so little on evaluations compared to the value of taxes. It explained that its £2 million budget was for external research only and that it also undertook internal evaluations and analysis. However, it had no central record of the research it had conducted internally.15 HMRC was also unable to tell us how much it had spent on internal research, and in written evidence submitted after the hearing stated that it did not record activity spent on reviewing reliefs internally.16 HMRC accepted that it was important for it to focus on bringing together its internal analysis and publishing whatever information it could.17
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Government response AI summary
The government states HMRC will continue to publish external evaluations and include relevant internal findings in consultation documents, and will implement a structured programme to publish internal analysis from 2021, subject to ministerial approval.
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HM Treasury
12
Conclusion
Twelfth Report: Management of tax relie…
Accepted
HMRC collects and reports data on who benefits from some tax reliefs. For example, HMRC reports annually on the number of people gaining from entrepreneurs’ relief 13 Written Evidence MTE0002 – Mr Richard Wild, Chartered Institute of Taxation, published 10 June 2020 14 C&AG’s report, paras 3.4 and 3.5 15 …
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HMRC collects and reports data on who benefits from some tax reliefs. For example, HMRC reports annually on the number of people gaining from entrepreneurs’ relief 13 Written Evidence MTE0002 – Mr Richard Wild, Chartered Institute of Taxation, published 10 June 2020 14 C&AG’s report, paras 3.4 and 3.5 15 Qq 40, 63 C&AG’s report, para 3.3, footnote 39 16 Q 41; Letter from Jim Harra, Chief Executive and First Permanent Secretary, HMRC, 26th June 2020 17 Q 63 18 Qq 32, 47; Written Evidence MTE0003 – Management of tax reliefs, Ruari Grant (Senior Public Affairs Associate, Standard life Aberdeen), and C&AG’s Report, para 9 and Figure 3 19 Qq 33, 47–48 20 Qq 47–48, 51 Management of tax reliefs 11 and how much they gain.21 In March 2020, as part of the 2020 Budget the Chancellor announced that he was reforming entrepreneurs’ relief on the basis that the relief was expensive, ineffective and unfair. The relief cost over £2 billion a year and nearly three quarters of the cost benefited just 5,000 individuals.22
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Government response AI summary
The government agrees with the committee, and HMRC will improve accessibility of data in its statistics and publicly report more information on beneficiaries of significant non-structural tax reliefs by the end of 2021, subject to data availability.
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HM Treasury
13
Conclusion
Twelfth Report: Management of tax relie…
Accepted
We asked HMRC what assessment it had made to determine who benefited from another large tax relief, the VAT relief on the construction of new dwellings. HMRC forecast that the relief cost £15 billion in 2018–19. We asked whether the relief would distinguish between the benefit of someone spending large …
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We asked HMRC what assessment it had made to determine who benefited from another large tax relief, the VAT relief on the construction of new dwellings. HMRC forecast that the relief cost £15 billion in 2018–19. We asked whether the relief would distinguish between the benefit of someone spending large sums of money to build a single house, compared to another spending the same amount of money to build many more houses for low-paid families. HMRC told us that this tax relief was intended to incentivise the construction of new dwellings and encourage housebuilding. It explained that it considered the test of whether this was a success to be based on whether the relief reached the intended target part of the economy rather than who benefited.
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Government response AI summary
The government agrees, and HMRC will improve the accessibility of its statistics and publicly report more information on beneficiaries of significant non-structural tax reliefs by the end of 2021, where data is available, acknowledging limitations for some reliefs like VAT on new dwellings.
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HM Treasury
15
Conclusion
Twelfth Report: Management of tax relie…
Accepted
We were concerned that the lack of available information on some large reliefs had meant that it was not possible for HMRC and HM Treasury to know whether all of those who were expected to benefit had been able to do so and whether a relief is working. We heard …
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We were concerned that the lack of available information on some large reliefs had meant that it was not possible for HMRC and HM Treasury to know whether all of those who were expected to benefit had been able to do so and whether a relief is working. We heard from Standard Life Aberdeen, who told us that lower-paid workers in specific groups, who most needed tax relief on their pensions contributions, were at most risk of missing out on this tax relief.25 The financial services company Royal London estimated that around 1.75 million low-paid and part-time workers, auto-enrolled into employer pensions, were missing out on tax relief on their pension contributions.26 Around three quarters of these workers are women.
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Government response AI summary
The government agrees to publish available data showing who benefits from pension tax reliefs by December 2021, acknowledging data limitations but committing to work towards improving published information.
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HM Treasury
17
Recommendation
Twelfth Report: Management of tax relie…
Accepted
When we examined tax reliefs in June 2014, we found that many tax reliefs were introduced without clear objectives. As part of our evidence session in 2014, HM Treasury told us that it was rare to have detailed objectives for reliefs, which we noted was a cause for huge concern.30 …
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When we examined tax reliefs in June 2014, we found that many tax reliefs were introduced without clear objectives. As part of our evidence session in 2014, HM Treasury told us that it was rare to have detailed objectives for reliefs, which we noted was a cause for huge concern.30 In February 2020, the NAO reported that HMRC considers some tax reliefs to be difficult to evaluate because they have multiple or unclear objectives. For the new and revised tax reliefs NAO examined, HM Treasury had set objectives in general terms but did not provide baselines against which benefits could be measured. In its public reporting, HMRC describes reliefs but does not explain the objectives they are designed to achieve.31
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Government response AI summary
The government accepts the recommendation and will explore the best way to collate and publish the objectives of non-structural tax reliefs throughout 2021, with a target implementation date of Autumn 2021.
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HM Treasury
18
Recommendation
Twelfth Report: Management of tax relie…
Accepted
Some tax reliefs incentivise behaviour, while others represent a choice by government to reduce the tax burden on particular groups or sectors. In 2019, HMRC completed an assessment of reliefs with economic and social objectives, resulting in them being grouped into three broad categories reflecting the broad type of outcome …
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Some tax reliefs incentivise behaviour, while others represent a choice by government to reduce the tax burden on particular groups or sectors. In 2019, HMRC completed an assessment of reliefs with economic and social objectives, resulting in them being grouped into three broad categories reflecting the broad type of outcome they were designed to achieve. Around 40% are designed to incentivise a specific behaviour, 40% to benefit a specific group, and 20% to serve a social purpose. This internal assessment was provisional. HMRC told us that the exchequer departments want to focus attention with their evaluations on those reliefs that are designed to achieve behaviour change. The NAO found that while HMRC’s categorisation was useful in understanding the broad objectives of tax reliefs, it was not sufficiently detailed to be able to identify tax reliefs targeted at similar sectors or with similar objectives.32
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Government response AI summary
The government accepts the recommendation and will explore the best way to collate and publish the objectives of non-structural tax reliefs throughout 2021, with a target implementation date of Autumn 2021.
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HM Treasury
19
Recommendation
Twelfth Report: Management of tax relie…
Accepted
We asked the exchequer departments why new reliefs were being introduced with unclear objectives. HMRC responded that some tax reliefs were expected to apply to a certain group and reflected a political choice about who or what to tax. It gave the example of marriage allowance, which recognises marriage in …
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We asked the exchequer departments why new reliefs were being introduced with unclear objectives. HMRC responded that some tax reliefs were expected to apply to a certain group and reflected a political choice about who or what to tax. It gave the example of marriage allowance, which recognises marriage in the tax system. HMRC explained that it could demonstrate the extent to which those who were entitled to it were receiving it, but questioned what objective this would demonstrate and whether the success of this relief could be assessed by the numbers getting married or the length of marriages.33 We also asked HM Treasury whether it was guilty of not giving Parliament sufficient clarity about the purposes of tax reliefs. It similarly explained that in some cases it was clear that a tax relief was intended to have a particular objective but in others it was a decision by Government to not levy tax on something. It asserted that in these cases, such as the decision not to charge VAT on food, the objective was simply to not tax a particular activity or group of people and the fact that the relief existed meant that the objective had been met.34 30 Committee of Public Accounts, Tax Reliefs, Third Report of Session 2014–15, HC 282, June 2014 31 C&AG’s report, paras 2.5, 3.5, 3.19 and Figure 9 32 Q 46, C&AG’s report, paras 1.4, 1.20–1.21 and Figure 7 33 Q 42 34 Q43 14 Management of tax reliefs Reporting on the cost and value for money of tax reliefs
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Government response AI summary
The government accepts the recommendation and will explore the best way to collate and publish the objectives of non-structural tax reliefs throughout 2021, with a target implementation date of Autumn 2021.
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HM Treasury
20
Recommendation
Twelfth Report: Management of tax relie…
Accepted
When we examined tax reliefs in 2014 we found that HMRC published estimates of only 46 reliefs which had economic and social objectives.35 Since then HMRC has responded to our recommendations that it be more transparent. In October 2019, it published for the first time a list of all 362 …
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When we examined tax reliefs in 2014 we found that HMRC published estimates of only 46 reliefs which had economic and social objectives.35 Since then HMRC has responded to our recommendations that it be more transparent. In October 2019, it published for the first time a list of all 362 tax reliefs with economic and social objectives.36 It has now reported costs for 158 of these reliefs and plans to reports costs for more reliefs over the next two years.37 However, in its public reporting HMRC does not compare the cost of tax reliefs to published forecasts.38
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Government response AI summary
The government accepts the recommendation, committing to HMRC publishing external evaluations and internal findings in consultation documents, and initiating a structured internal evaluation program from 2021, with a target implementation date of December 2021.
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HM Treasury
21
Recommendation
Twelfth Report: Management of tax relie…
Accepted
Government’s published estimates of the costs of tax reliefs are prepared by HMRC and scrutinised by the Office for Budget Responsibility (OBR) in its role as the government’s official forecaster. Higher costs can indicate that a tax relief is working well or that it is not being used as intended.39 …
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Government’s published estimates of the costs of tax reliefs are prepared by HMRC and scrutinised by the Office for Budget Responsibility (OBR) in its role as the government’s official forecaster. Higher costs can indicate that a tax relief is working well or that it is not being used as intended.39 In 2014, we concluded that departments did not keep Parliament adequately informed of changes to the costs of tax reliefs. We also found that there was no feedback mechanism to alert Parliament if the actual cost of tax reliefs varied from HM Treasury’s forecasts, on which Parliament had based its approval of the relief. We said that in the future we would look at what the exchequer departments had done to provide proportionate feedback and analysis to Parliament each year on the costs of principal tax reliefs (those costing more than £50 million annually), including significant changes in costs.40 In their response, the exchequer departments said that the government was transparent about both the costs of existing reliefs and the costs and likely impacts of new reliefs with, for example, HMRC annually publishing information on the Exchequer cost of existing tax reliefs.41
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Government response AI summary
The government accepts the recommendation, stating that HMRC will expand commentary on the variance of high priority non-structural tax reliefs over time in its 2020 statistics and plans to publish more information on initial forecast estimates from October 2020.
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HM Treasury
22
Conclusion
Twelfth Report: Management of tax relie…
Accepted
HMRC has not compared the costs of tax reliefs to government’s original published forecasts. The NAO examined the costs of ten tax reliefs introduced since 2013. Of these, the costs of four tax reliefs were at least double government’s original forecasts. For example, the research and development scheme for large …
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HMRC has not compared the costs of tax reliefs to government’s original published forecasts. The NAO examined the costs of ten tax reliefs introduced since 2013. Of these, the costs of four tax reliefs were at least double government’s original forecasts. For example, the research and development scheme for large companies cost £2 billion in 2017–18 against a forecast of £1 billion when it was introduced. In July 2019, OBR reported that the cost of tax reliefs was poorly understood. It found that HMRC could not offer explanations for large changes in the cost of the research and development reliefs or entrepreneurs’ relief.42
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Government response AI summary
The government agrees and states that HMRC will expand commentary on cost variance in 2020 statistics and plans to publish more information on initial forecast estimates for high priority non-structural tax reliefs starting October 2020.
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HM Treasury
23
Conclusion
Twelfth Report: Management of tax relie…
Accepted
We asked the exchequer departments whether reliefs costing double what HMRC had forecast meant that they were out of control. They asserted that they could not anticipate everything when they made their forecasts. They outlined factors that could affect costs including shifts in science and technology, reliefs driving changes in …
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We asked the exchequer departments whether reliefs costing double what HMRC had forecast meant that they were out of control. They asserted that they could not anticipate everything when they made their forecasts. They outlined factors that could affect costs including shifts in science and technology, reliefs driving changes in behaviours and changes in the economic determinants which underpin forecasts, such as the level of investment. They also stated that variances between forecasts and actual costs can occur because of changes in the underlying tax rates.43 35 Committee of Public Accounts, Tax Reliefs, Third Report of Session 2014–15, HC 282, June 2014 36 HMRC, Estimated Costs of Tax Reliefs, October 2019 37 HMRC, Non-structural tax reliefs – Additional cost estimates, May 2020 38 C&AG’s report, paras 3.18 and 3.19 39 C&AG’s report, paras 2.16–2.17 40 Committee of Public Accounts, Tax Reliefs, Third Report of Session 2014–15, HC 282, June 2014 41 HM Treasury, Government responses on the Sixty First report (Session 2013–14) and the First to the Seventh reports from the Committee of Public Accounts: Session 2014–15 42 C&AG’s report, paras 2.17, 2.24, Figures 10 and 11 (2017–18 is latest year for which data are available) 43 Qq 28, 36, 39 Management of tax reliefs 15
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Government response AI summary
The government accepts the implied recommendation to address forecast variances by expanding commentary on costs and publishing more information on initial forecast estimates in its tax relief statistics, starting October 2020.
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HM Treasury
24
Recommendation
Twelfth Report: Management of tax relie…
Accepted
We asked HMRC and HM Treasury what action they took to follow up on cost forecasts and understand the actual costs of new tax reliefs. HM Treasury told us that there was a variety of reasons why the cost of a tax relief might be different to what was expected …
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We asked HMRC and HM Treasury what action they took to follow up on cost forecasts and understand the actual costs of new tax reliefs. HM Treasury told us that there was a variety of reasons why the cost of a tax relief might be different to what was expected and that it kept the cost of reliefs under review. HMRC similarly asserted that it based its forecasts on modelling using the best evidence it had available but that unexpected changes, such as in exchange rates, could occur that could result in significant variances. HMRC confirmed that it was committed to increasing the transparency of the information it made available on costs and in its autumn 2020 statistical bulletin it would start including explanations for how costs compare to original forecasts.44
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Government response AI summary
The government agrees with the recommendation, and HMRC will expand commentary on cost variances over time for high priority non-structural tax reliefs in its 2020 statistics, and publish more information on initial forecast estimates starting in October 2020.
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HM Treasury
26
Conclusion
Twelfth Report: Management of tax relie…
Accepted
In our June 2014 report on tax reliefs we concluded that the exchequer departments did not respond promptly to unexpected increases in the costs of reliefs. We found that HMRC took time to react when it noticed a cost increase as it wanted to ensure that its response was appropriate, …
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In our June 2014 report on tax reliefs we concluded that the exchequer departments did not respond promptly to unexpected increases in the costs of reliefs. We found that HMRC took time to react when it noticed a cost increase as it wanted to ensure that its response was appropriate, but that this increased the amount of public money at risk.50 In March 2015 we questioned whether entrepreneurs’ relief was value for money given it was costing £2 billion more than forecast. HMRC told us that the cost variation was due in large part to changes in the scope of the relief. It told us that it had no evidence to suggest that there was systematic abuse of entrepreneurs’ relief and no evidence to suggest that Parliament’s intentions were not being achieved.51
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Government response AI summary
The government agrees to accelerate response times for tax reliefs, stating it already keeps them under review and takes action, but also committing to set and publish criteria for evaluating tax reliefs and consider indicators to improve understanding of their value.
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HM Treasury
28
Conclusion
Twelfth Report: Management of tax relie…
Accepted
Research and development tax relief for small- and medium-sized enterprise is designed to support companies that work on innovative projects in science and technology.57 The cost of the research and development relief for small- and medium-sized enterprises increased from £0.8 billion in 2014–15 to £2.2 billion in 2017–18. This increase …
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Research and development tax relief for small- and medium-sized enterprise is designed to support companies that work on innovative projects in science and technology.57 The cost of the research and development relief for small- and medium-sized enterprises increased from £0.8 billion in 2014–15 to £2.2 billion in 2017–18. This increase was faster than any published forecasts suggested. The NAO found that the higher costs of the research and development relief for small- and medium-sized enterprises was in part due to abuse and poor-quality claims. The relief has suffered from abuse by companies with a minimal UK presence. This abuse started after a control was lifted in 2012 which had sought to ensure that companies claiming payments through the research and development scheme had not been arranged solely for this purpose. HMRC identified that companies were exploiting the removal of the control in early 2018, and the government is now planning 50 Committee of Public Accounts, Tax reliefs, Third Report of Session 2014–15 Report, together with formal minutes related to the report, HC 282, June 2014 51 Committee of Public Accounts, The effective management of tax reliefs, Forty-ninth Report of Session 2014–15, HC 892, March 2015 52 IFF Research, Capital Gains Tax Relief – Research on Entrepreneurs’ Relief and Business Asset Rollover Relief, February 2015 53 IFF Research, Capital Gains Tax Entrepreneurs’ Relief: Behaviours and Motivations – HMRC Research Report 456, May 2017 54 Budget Speech 2020, available at https://www.gov.uk/government/speeches/budget-speech-2020 55 C&AG’s report, Figure 12 56 Q 63 57 HMRC, Claiming Research and Development tax reliefs, March 2020 Management of tax reliefs 17 a further change in legislation to address this. It has proposed introducing a new control capping the payments a company can receive in a year. The cap will be linked to the amount a company pays in PAYE and National Insurance Contributions.58
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Government response AI summary
The government outlines existing steps taken to combat abuse of R&D tax relief, including using ‘spotlights’ to warn of concerns, increasing compliance staff by 100 FTE, requiring CT600 forms with tax computations from April 2019, and engaging with the R&D Consultative Committee.
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HM Treasury
30
Conclusion
Twelfth Report: Management of tax relie…
Accepted
The main cause of lost tax on the research and development scheme for small- and medium-sized enterprises is from poor quality claims, which has been an issue since the scheme was introduced. We raised the issue with HMRC of the higher than expected number of claims for the relief and …
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The main cause of lost tax on the research and development scheme for small- and medium-sized enterprises is from poor quality claims, which has been an issue since the scheme was introduced. We raised the issue with HMRC of the higher than expected number of claims for the relief and the role of agents in making these claims. HMRC said it was a relief that it had to police quite carefully. It explained it faced two issues. First, some businesses tested the boundary of the relief by arguing that their expenditure was within the scope of the relief. Second, agents produced some claims, but these were not to the standard that HMRC would have liked. HMRC told us that it had confidence in how it administered the relief, and that it placed a great deal of resource and attention into making sure that claims were right.62 HMRC set out the actions it had taken which included: • allocating funding in 2020–21 for an additional 100 staff to be deployed predominantly on compliance activities, such as investigative work and risking claims; • reorganising teams processing claims so that they were better able to manage peaks of work; • from April 2019, requiring companies to provide more information to support claims; and • working with agents and tax advisers to improve the standard of claims.63 58 C&AG’s report, paras 2.20–2.27 ad Figure 12; and HM Treasury, Open consultation – Preventing abuse of the R&D tax relief for SMEs: second consultation, March 2020 59 C&AG’s report, para 2.27; HM Treasury, Budget 2020 – Delivering on our promises to the British people 60 Q 44 61 Letter from Jim Harra, Chief Executive and First Permanent Secretary, HMRC, 26th June 2020 62 Q 34, C&AG’s report, para 2.27 63 Letter from Jim Harra, Chief Executive and First Permanent Secretary, HMRC, 26th June 2020 18 Management of tax reliefs
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Government response AI summary
The government reiterates its actions to combat abuse and poor-quality R&D claims, including using ‘spotlights’ for warnings, increasing compliance staff by 100 FTE, implementing new CT600 filing requirements from April 2019, and regular engagement with the R&D Consultative Committee.
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HM Treasury