HMRC and the Treasury display lack of leadership on environmental taxation

The Treasury and HMRC have a ‘limited understanding of the environmental impact’ of taxes and were unable to explain ‘how the tax system is used in achieving the government’s environmental goals’ said the House of Commons’ Public Accounts Committee.

In its report Environmental tax measures MPs say the departments ‘have yet to plan for the impact of the government’s environmental ambitions on tax revenues’. For example £28bn of fuel duty was raised in 2019-20 but this will decline as people change to electric vehicles to meet the government’s target to end the sale of new petrol diesel and hybrid cars by 2035. But says the committee the Treasury ‘cannot explain how it will manage declining revenues from consumption of fossil fuels’.

The committee sees ‘a lack of leadership and co-ordination’ that mirrors findings in its recent reports Achieving government’s...