Recommendation 22

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