The Treasury Committee calls for evidence on a new inquiry into tax reliefs. The inquiry will examine the tax reliefs available to individuals and businesses, and explore whether these provide benefits to the broader economy.
Scope of the inquiry
MPs on the cross-party Committee would welcome views on whether the current suite of tax reliefs provides value for money, and if, among other things, they impact employment, investment and growth in the UK. The Committee also calls for stakeholders to submit evidence on whether reliefs are being used in the way they were intended, and if they cause problems to the tax system, such as through tax evasion or avoidance. International comparisons are particularly welcomed, and thoughts are also requested on potential reforms to the system of tax reliefs. Proposals for the addition or removal of reliefs, as well as views on the current administration framework and means testing, are also welcomed.
Commenting on the new inquiry, Rt. Hon. Mel Stride MP, Chair of the Treasury Committee, said:
“Tax reliefs can play an important role in promoting investment, creating employment, and generating growth. As a Committee, we are launching a new inquiry to investigate whether tax reliefs benefit the UK’s economy and if they provide good value for money for taxpayers. We are also interested in any problems they may cause for the tax system, and the scope for reform. We look forward to receiving evidence submissions on this important topic.”
Terms of reference
- This inquiry will look at the many tax reliefs available to individuals on their personal tax liabilities, and those available to businesses. It will examine whether the system of reliefs as a whole achieves benefits for the UK economy that justify their cost.
- Does the current suite of tax reliefs represent good value for money? The Committee would welcome answers in relation to:
- Economic growth
- Research and development
- Non-economic benefits and desirable behaviours
- Any other appropriate measure
- The Committee would also welcome any views on how the various reliefs rank relative to each other in terms of cost effectiveness.
- Do “cliff edges” in the structure of tax reliefs lead to problems for taxpayers, businesses or for the wider economy?
- Are tax reliefs being used in a way that Parliament or Government intended?
- What problems do tax reliefs cause, whether in relation to the tax system including tax evasion or avoidance, or the wider economy? In answering this question, please identify particular reliefs and where possible, quantify the problems caused.
- Please outline potential reforms to the system of tax reliefs, whether related to:
- Adding additional tax reliefs
- Removing or reforming current tax reliefs
- The administration of tax reliefs, including reforms to reduce complexity or cost of administration
- The Government’s analysis and transparency around tax reliefs.
- Means testing and targeting
- In any responses, the Committee would particularly welcome international comparisons and relevant measures and data.
- When considering tax reliefs, the Committee will follow HMRC’s definition of tax reliefs, summarised as follows:
- Structural reliefs – reliefs which are integral parts of the tax structure. The purpose of these reliefs is to define the scope of the tax or calculate income or profits correctly. For example, allowances that make a portion of income tax-free, such as the personal income tax allowance.
- Non-structural reliefs – reliefs designed to encourage particular activities or behaviours in order to achieve economic or social objectives. For example, tax reliefs available to companies to encourage research and development activity.
The deadline for submitting evidence is 5pm on Monday 19 September 2022.
- Read the guidance on giving evidence to a House of Commons select committee.
- Submit evidence to this inquiry via the Committee’s web portal