Government responds to Treasury Committee’s Report on Tax Reliefs ahead of HMRC session

• Tax reliefs report
• Government response

The report called for a comprehensive review of all current tax reliefs. This would ensure any areas vulnerable to abuse are identified while also improving scrutiny on how tax reliefs impact the public purse. 

During its inquiry, the Committee heard that only 365 out of a total of more than 1,180 forms of active tax reliefs have been officially costed by HMRC. Cross-party MPs recommended that HMRC publish costings for all tax reliefs from the 2025/26 financial year onwards. 

Furthermore, the Committee found that tax reliefs costs are not scrutinised in the same way as Government spending. It was recommended that reliefs are reclassified in such a way as to track their cost in the same way as other spending decisions. 

In its response, the Government indicated its agreement with the concerns raised by the Committee but asserted its view that carrying out the proposed work would not be the best use of resources. The Government also felt a number of the recommendations were already delivered by existing processes. 

Chair's comment

Commenting on the Government response, Harriett Baldwin MP, Chair of the Treasury Committee said:

“Our tax system is too complicated.  It is disheartening to learn that the taxman has no plans to even measure the cost of benefit of hundreds of different tax reliefs – something that would help Ministers simplify the tax system and target growth.”

HMRC officials are set to appear in front of the Committee on Wednesday 18 October, where they will be questioned on the work of the department, its customer service and its effectiveness in collecting tax revenue. 

Further information

• Inquiry: Tax reliefs
• Treasury Committee

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