Source · Select Committees · Public Accounts Committee
Recommendation 11
11
We asked how the exchequer departments could be sure of the impact that pension tax...
Conclusion
We asked how the exchequer departments could be sure of the impact that pension tax reliefs were having if they had not evaluated them. HMRC asserted that pension reliefs had been subject to extensive evaluative attention, with “virtually no stone left unturned” as part of work to strengthen the incentive to save in 2015. However, it also accepted that it had not commissioned an external evaluation of the relief. HM Treasury added that it had undertaken substantial open consultation and research, including with focus groups, as part of its 2015 review, and that the Government had decided not to change the relief as a result. We encouraged HMRC and HM Treasury to commission a full external evaluation of the relief and to publish the information it held on the relief in order to encourage and support debate on this issue.20 Identifying who benefits from tax reliefs
Government Response
Not Addressed
HM Government
Not Addressed
1.3 The Government disagrees with the Committee’s recommendation. 1.4 The Government has undertaken several consultations on aspects of pensions tax relief over the last few years, including: a. Pensions tax relief administration: call for evidence (July 2020) b. Public service pension schemes consultation: changes to the transitional arrangements to the 2015 schemes (July 2020) c. Changes to income thresholds for calculating the tapered annual allowance from 6 April 2020 (March 2020) d. Reducing the money purchase annual allowance: consultation (response: March 2017) e. Strengthening the incentive to save: consultation on pensions tax relief (response: March 2016) 1.5 These investigations included gathering views and evidence from stakeholders to understand the regime’s impacts and the impacts of possible changes. The evidence provided directly influenced policy development. For example, responses to the 2015 wide-ranging consultation on pensions tax relief indicated there was no clear consensus for reform at that time, and so at Budget 2016 the then government announced it would not make fundamental reform to pensions tax reliefs at that stage. 1.6 The government will continue to engage with stakeholders to understand the regime’s impacts and gather evidence through consultations such as those listed above but does not think it is the right time now for a formal evaluation.