Central Finance and Treasury

Confirmed impacts: Encouraging the effective management of tax reliefs

This impacts case study shows how our work on these important policy mechanisms led HM Revenue & Customs and HM Treasury to take action on ensuring tax reliefs are achieving their aims, administered in accordance with risk and are efficient.

It is one example of financial or non-financial benefits realised in 2014 as a result of our involvement, all of which are set out in our interactive PDF.

Tax Form

Impacts case study

Our work on tax reliefs in 2014 broke new ground regarding the level of accountability needed for these important policy mechanisms. Our work illustrated that reliefs are material to the UK’s fiscal position, but there is no consistent approach to introducing or modifying these. We recommended that HM Revenue & Customs (HMRC) develop a methodology for identifying similar reliefs and the level of administration needed for each type.

What are impacts?

HMRC and HM Treasury both agreed they have responsibility for evaluating whether reliefs are achieving their aims and for assessing their costs and benefits. We saw examples of good practice emerging. HMRC uses specialists to monitor patent box relief and is developing new techniques to respond quickly to analyse any changes in its use. We have encouraged HMRC, with HM Treasury, to determine an appropriate level of administration for tax reliefs in proportion to risk.

Work In Progress