Source · Select Committees · Public Accounts Committee
Recommendation 5
5
HMRC and HM Treasury do not publish sufficient information on the value for money of...
Conclusion
HMRC and HM Treasury do not publish sufficient information on the value for money of tax reliefs to enable Parliament to hold government to account. In response to examinations by this Committee, HMRC now publishes a list of all tax reliefs which support government objectives, and now reports costs for 158 of these reliefs, up from 46 in 2014. However, since our last major report in 2015, HMRC has published evaluations of the impact of just 13 tax reliefs. Although it claims to undertake internal assessments of reliefs, HMRC cannot show which reliefs it has evaluated internally. In 2017, HM Treasury began to make assessments of the value for money of tax reliefs. When assessing value for money, HM Treasury considers factors such as how the cost of the tax relief compares to forecast, the extent of behaviour change and deadweight loss, and consideration of spending alternatives. HM Treasury does not publish its value for money assessments as it asserts they Management of tax reliefs 7 are policy advice to ministers and do not represent the formal position of the department. Published information on factors covered by the assessments would help Parliament to hold government to account for their use of tax reliefs. Recommendation: • HMRC should ensure that the results of internal, as well as external, evaluations are published, and are easily accessible to Parliament and the public • HM Treasury should in 2021, prepare its first annual report setting out the results of its value for money assessments of tax reliefs.
Government Response
Not Addressed
HM Government
Not Addressed
5: PAC conclusion: HMRC and HM Treasury do not publish sufficient information on the value for money of tax reliefs to enable Parliament to hold government to account. 5a: PAC recommendation: HMRC should ensure that the results of internal, as well as external, evaluations are published, and are easily accessible to Parliament and the public. 5.1 The Government agrees with the recommendation. Target implementation date: December 2021 5.2 The government recognises the importance of transparency in providing information to inform the understanding of tax reliefs. HMRC includes links to external evaluations and research reports about tax reliefs in the annual statistics publications. HMRC will continue to publish externally commissioned evaluations and to include relevant internal evaluation findings in consultation documents. 5.3 HMRC's internal analysis takes a wide range of forms from comprehensive impact assessments to analysis to feed into policy advice to Ministers on specific options, proposals and decisions, which is necessarily confidential. In 2021 HMRC will put in place a more structured programme of internal evaluation work including plans to start publishing this analysis from 2021, subject to Ministerial approval. It will however remain the case that unpublished information included in policy advice for Ministers will be subject to the normal confidentiality arrangements for such advice. 5b: PAC recommendation: HM Treasury should in 2021, prepare its first annual report setting out the results of its value for money assessments of tax reliefs 5.4 The Government disagrees with the recommendation. 5.5 The current value for money assessments made by HM Treasury are part of the policy making process and part of advice to Ministers, which is necessarily confidential. 5.6 The government continues to increase the amount of information publicly available on costs of tax reliefs. For instance, HMRC is providing more information on costs. In order to accelerate provision of additional material on costs of reliefs, HMRC has prioritised analytical resource to undertake a project to publicly provide more information on the costs for reliefs where none are currently published. 5.7 The Government commits to consider the recommendation made by the NAO to “develop a robust methodology for assessing the value for money of different types of tax expenditures” and what indicators could be used to increase understanding around the value of tax reliefs.