Recommendation 23

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