Recommendation 24

We asked HMRC and HM Treasury what action they took to follow up on cost forecasts and understand the actual costs of new tax reliefs. HM Treasury told us that there was a variety of reasons why the cost of a tax relief might be different to what was expected and that it kept the cost of reliefs under review. HMRC similarly asserted that it based its forecasts on modelling using the best evidence it had available but that unexpected changes, such as in exchange rates, could occur that could result in significant variances. HMRC confirmed that it was committed to increasing the transparency of the information it made available on costs and in its autumn 2020 statistical bulletin it would start including explanations for how costs compare to original forecasts.44