MPs to probe value for money of tax reliefs

The House of Commons public accounts committee has opened an inquiry into the management of tax expenditures - tax reliefs granted on various activities or goods.

The tax system has more than 300 of these reliefs and in 2018-19 they cost about £155bn of foregone tax revenues. The largest tax expenditures are on pension contributions not imposing VAT on food and new dwellings and not charging capital gains tax on people’s main home.

In a report published in February 2020 the National Audit Office (NAO) repeated previous concerns about the effectiveness of the Treasury’s and HMRC’s management of tax expenditures. It found there was no formal framework governing the administration or oversight of tax expenditures and that while the departments have begun to increase their oversight of tax expenditures and more actively consider their value for money ...