Recommendation 19

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